The Impact of Brexit on Ireland’s Commercial Property Market

Here in Ireland, residential housing is an ongoing critical issue due to a severe lack of supply, however in contrast, the commercial property market, primarily in main cities and large provincial towns is buoyant. Demand is at a high with companies competing for space and investors keen to purchase in prime locations at discounts from the funds. The economic outlook is positive with the unemployment rate at 6.1%.

Over the water, the uncertainty of Brexit, brings with it a slowing down of the UK commercial property market. This sees UK developers and investors  taking an interest in the Irish market.  And unlike their Irish counterparts, who are still having difficulties accessing finance from the Irish Pillar banks, UK developers, typically have access to multiple sources of finance.

According to the SCSI Commercial Property Review, prime office investment performed well in 2017, particularly in Dublin. Cork also experienced a significant increase in demand for office floorspace. Industrial rents increased in Dublin and the rest of Leinster in 2017, but fell in Munster and Connaught/ Ulster. Modern industrial warehouse stock is difficult to source but retail rents remained steady in 2017 in Dublin and the rest of the country.

The reality is it took a long 12 years from Britain’s first application to join the European Union in 1961 to its membership in 1973 and it will be no surprise if, in 2028, 12 years after the vote to leave, the EU and UK have still not reached an agreement. This ongoing uncertainty, is prompting both UK investors and companies alike to seek commercial property in Ireland. This uncertainty coupled with positive Irish economic growth, means that demand for commercial property, particularly, in cities and large provincial towns Dublin, Cork and Galway remains high.