€800m worth of deals due to be finalised in coming months, says CBRE
Agency says biggest challenge for retail sector is shortage of properties in right location
There has been plenty of appetite for assets such as the Dundrum Town Centre. Photograph: Matt Kavanagh/The Irish Times
CBRE expects up to €400 million of retail investments and another €400 million of offices to be formally launched for sale over the coming months.
The agency says “several large transactions are expected to conclude” shortly and it expects a surge in the volume of property assets on the market.
“There is particularly strong demand for large assets as investors look to get money into the market quickly, as demonstrated by the appetite for assets such as Dundrum Town Centre,” says Marie Hunt, head of research at CBRE.
“This appetite for large assets will become even more pronounced over the coming months as investors seek to deploy capital before year-end.”
Ms Hunt says the biggest challenge facing the retail sector is a scarcity of properties in the locations and schemes that retailers are targeting, with many prime high streets and shopping centres now at full occupancy.
“This will force some pop-up or temporary retailers, who normally start to look for Christmas premises at this stage in the year, to opt for secondary streets and schemes this year,” she says.
CBRE says there is “particularly strong demand” for relatively small amounts of office space in Dublin – typically between 465sq m (5,005sq ft) and 1,395sq m (15,000sq ft) – while 19 new office schemes are under construction in the capital.
However, this new space amounts to just over one year’s annual average take-up and some 45 per cent of this new space is already committed.
“It will be 2017 before there is a meaningful improvement in office supply and rents will inevitably continue to rise in the interim,” says Ms Hunt.
Twelve Irish hotel transactions closed during the summer, and “there is now a scarcity of hotels to satisfy inherent volumes of demand from hoteliers and investors”.