Report Summary
The Irish commercial property market in 2024 was shaped by economic fluctuations, geopolitical uncertainties, and inflation. Despite a slight GDP contraction (-0.5%), strong foreign direct investment and government surpluses provided resilience. The European Commission forecasts 4% growth in 2025, with stable unemployment rates (4.4-4.5%) and controlled inflation (~1.7-1.9%).
Key Market Trends & Performance
Occupier & Investor Demand:
- Occupier demand saw a significant increase (+17% in Q4 2024 vs. -4% in Q4 2023).
- Investor sentiment improved (+5% in Q4 2024 from -23% in Q4 2023).
- Office sector rebounded (+15% in Q4 2024 from -32% in Q4 2023).
- Retail sector demand grew significantly (+22% in Q4 2024 from +1%).
Capital & Rental Value Expectations:
- Capital values are projected to rise by +15% in 2025 (vs. -27% in Q4 2023).
- Rental values are expected to grow by +19% (vs. -7% in Q4 2023).
- Prime industrial properties to see the highest gains in capital (+3.2%) and rental values (+3.1%).
Sectoral Analysis
- Office Market: Demand is rising for high-quality, well-located spaces, while older properties face obsolescence.
- Retail Market: Demand is strengthening, particularly in urban areas with strong consumer activity.
- Industrial Market: Investment sentiment turned positive for the first time in two years, reflecting growth in logistics and distribution.
Credit & Market Valuation
- Credit conditions improved significantly, driven by interest rate cuts from the ECB and Central Bank of Ireland.
- Fewer surveyors perceive property values as expensive (35% in Q4 2024, down from 42% in Q4 2023).
Sustainability & Retrofitting
- 54% of surveyors report increased occupier demand for energy-efficient office spaces.
- 71% anticipate growing demand for retrofitting, particularly in office properties.
- Retail sector lags behind in sustainability adoption, with cost-sensitive tenants deprioritizing ESG.
Conclusion & Outlook for 2025
The commercial property market is transitioning into a recovery and growth phase, supported by rising demand, improving credit conditions, and sustainability considerations. Industrial and prime office assets are expected to lead the recovery, while older properties may require retrofitting to remain competitive.