According to a report by BNP Paribas Real Estate, Irish commercial property dealmaking reached a near-record low in the first half of 2023. Spending during this period dropped by more than half to €985 million compared to the same period last year.
The decline in transactions accelerated in the second quarter, with only €475 million worth of deals completed, down from €510 million in the first quarter. This marked the lowest level of investment in the second quarter since 2012.
The report identified several factors contributing to the decline in dealmaking, including the ongoing uncertainty surrounding the economic impact of the COVID-19 pandemic, rising interest rates, and the war in Ukraine.
Despite the overall decline, there were positive aspects in the market. The report highlighted strong demand for logistics properties and offices in Dublin‘s city center.
However, the outlook for the Irish commercial property market remains uncertain. The report suggests that the market is likely to remain subdued in the near term as investors adopt a cautious approach while monitoring the evolving economic and geopolitical landscape.
Here are some additional details from the report:
- The decline in dealmaking was broad-based, with all major sectors affected.
- The office sector was the hardest hit, with investment volumes down by 60% year-on-year.
- The retail sector also saw a significant decline in investment, with volumes down by 50%.
- The logistics sector was the only sector to buck the trend, with investment volumes up by 20%.
The report concluded that the Irish commercial property market is likely to remain subdued in the near term, but that there are some positive signs that the market could start to recover in the second half of the year.
