The Society of Chartered Surveyors Ireland Commercial Property Review and Outlook 2018

The Society of Chartered Surveyors Ireland Commercial Property Review and Outlook 2018

The Society of Chartered Surveyors Ireland Commercial Property Review and Outlook 2018

  • Press Release

The Main Survey Findings: 

  • Prime office and retail rents in Dublin expected to rise by 5% and 6% respectively in 2018
  • Prime office and retail rents nationally expected to rise by 5% and 7%
  • Surveyors say figures show commercial property markets dominated by Dublin and Cork
  • Prime retail rents in Dublin are €6,000 per sqm, over 6 times the national average
  • Prime office rents in the capital are €638 per sqm, over 3 times the national average
  • Over half of surveyors believe online shopping is having a major impact on retail
  • Munster rents predicted to show strongest growth this year

Thursday 1st March 2017. Prime office and retail rents in Dublin are expected to rise by 5% and 6% respectively in 2018, while prime industrial rents in the capital are expected to rise by 7% according to a new commercial property survey by the Society of Chartered Surveyors Ireland.
Surveyors expect prime office rents nationally to increase by 5%, prime retail rents to rise by 7% and prime industrial rents to increase by 6%. While rents and values across all commercial property are predicted to rise this year, the report found that prime office rents in Dublin are expected to increase at a slightly slower pace than was expected in 2017.
Over 400 Estate Agents and Chartered Surveyors from all over the country took part in the survey while Future Analytics Consulting was commissioned by the SCSI to carry out the research.
Speaking on behalf of the Society of Chartered Surveyors Ireland, James Mulhall, who is Managing Director of Murphy Mulhall, said that while there were signs the recovery was gaining pace in Munster, particularly in Cork City Centre, the widening divergence between Dublin and the rest of the country was an issue which needed to be addressed.

“A commercial property market is a subset of the economy in which it exists and that is reflected in the findings of this survey. Chartered Surveyors are predicting prime office rents will rise by up to 7.2% in Munster this year, prime industrial rents will rise by 8.9%, while prime retail rents will rise by 5%. However, when you see that prime retail rents in Dublin are €6,000 per sqm, over 6 times the national average and prime office rents are €638 per sqm, over 3 times the national average, you realize the scale of the rental imbalance which exists. At the other end of the scale, Sligo, where the Government recently announced the National Development Plan, has the highest commercial vacancy rates in the country of 19%. With current rent levels in Dublin heading back towards 2007 levels, we need Cork, Galway and other cities to provide viable alternatives for sustainability in the overall commercial property market.”

“One area where surveyors are slightly more optimistic this year is Brexit, but once again it’s very much dependant on location. 39% percent of surveyors in Dublin believe Brexit will have a positive impact on business activity, but this drops to 9% in the Rest of Leinster and zero in Munster and Connacht/Ulster. Our members in the border region especially believe weakersterling and market uncertainty has already impacted property investment in the area.”

“The other main challenges identified by surveyors for the year ahead in this report are the shortages of suitable property, the rise of online shopping (over half of surveyors believe online is having a major impact on retail) and the effects which the rising costs of housing may have on business relocation decisions and FDI generally, particularly in Dublin” Mulhall said.

Office Sector

The office sector was by some margin the most active commercial property sector in 2017, particularly in Dublin where there was a record take up of office space (325,000 sqm – 344,000sqm). That said, Cork has also experienced a significant increase in demand for office accommodation, particularly in city centre and prime business park locations. The success of the office market last year reflects the pattern of growth over the last few years which has been directly linked to our positive economic recovery.

According to the Report, 7 out of 10 surveyors in Dublin believe the availability of office space will increase this year while over half believe vacancy rates will continue to decrease. In Munster, 62% of surveyors believe the availability of office space will increase while 92% believe vacancy rates will decrease. In Connacht/Ulster 64% of surveyors believe take-up will increase and vacancy rates will decrease. Surveyors in both Dublin and Munster said the main issue was the shortage of quality office space. By contrast, in the Rest of Leinster 86% of surveyors said they believed availability will remain the same while they saw their main challenge as lack of demand.

James Mulhall, an office market expert, said one of the key trends identified for 2018 was in the co-working / flexible office space area.

“The surge in growth of co-working and flexible workspaces over the last 12 months is clearly changing the dynamic of the office market. It is too early to judge the real impact although predictions of the demise of the traditional office are almost certainly premature. The co-working revolution is delivering much needed flexibility for occupiers who are struggling to find this through conventional leases. It also creates transparency and some efficiencies on costs. It’s initial success in Dublin is being influenced mainly by the demand from the tech/creative/digital (TCD) sector. The question that remains unanswered is whether they can survive a market correction or downturn in occupier demand. Operators say they can, while others will point to previous dips in market cycles when conventional leases become cheaper. Time will tell but, in the meantime, the market will need to pay close attention to this sector.”


Following a dynamic performance in 2016, the retail market performance in 2017 can be considered modest.

In Dublin, median prime retail rents are €6,000 per sqm, in Connacht/Ulster they are €1,150 per sqm, in Munster they are €1,100 per sqm, while in the Rest of Leinster they are €340 per sqm. While rents in the Rest of Leinster are predicted to grow the most this year – by 9% – it is clear the province is playing catch up with the other regions.

Mulhall said over half of surveyors pointed to the impact of online shopping.

“56% of respondents ranked online shopping as either the first or second most important issue impacting the retail market in their region for 2018. Of these, 35% ranked it as the top issue. Clearly, retailers are aware of the need to adapt to the changing consumer environment if they are to sustain their businesses. The other key challenges identified by surveyors were low tenant demand and unsuitably sized floor plates.


There has been a boost in activity within the industrial sector in 2017 nationally, with all regions reporting an increase in demand. Median industrial rents were the strongest performer during the year, rising by 11% overall. To put this in context, office rents rose by 5%. However, potential growth in the sector in all regions is hampered by a lack of modern warehouse space and this is having a knock-on effect on rental growth in some locations. The shortage of supply is felt most keenly in Connacht/Ulster where 75% of surveyors expect supply to be less than demand for prime industrial space both under and over 500 sqm.

Mulhall said there were opportunities, the question is can we avail of them?

“The changing face of retail and its knock on effects into logistics will significantly impact the industrial sector, with the prospect of new and expanding distribution and delivery centres throughout Ireland. If there is continued uncertainty regarding the movement of goods from the UK following its departure from the EU, there will be increased demand also arising from this. Therefore, it’s essential that there are suitable modern logistic facilities available if we are to take full advantage of these situations” he concluded.

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