According to Industry experts during the first half of 2023, the Irish commercial property market suffered the third sharpest decline out of 27 European countries in investment.  With many investors and real estate specialists saying the market is at a near standstill.

There were high hopes that the market might start to rebound after a disappointing first quarter, but the second quarter of 2023 actually performed worse than the first.

How much money is being invested?

During the three-month period, income-producing properties worth €333.4 million changed ownership, marking a significant decline of 47% compared to the previous quarter. Additionally, this figure was down by a substantial 73% when compared to the same quarter of the previous year.

A prominent real estate professional noted that

“It is a sobering reality that market turnover between April and June was less than that recorded in any quarterly period during the pandemic,” 

He went on to comment that the market’s response to the current environment of higher interest rates has been relatively slow, contributing to the challenges faced in the real estate sector.

Who was Investing?

German investors were the biggest foreign buyers of Irish investment property between 2016 and 2021, accounting for around a fifth of market turnover.

But around about the time that interest rates started rising back in 2022, many German investors began exiting Irish property investments.

German money typically comes in the form of institutional investment, such as property funds, private equity and or pension funds which target reliable, consistent and steady income growth

The next two biggest investors in commercial property were French and domestic investors.

What does this mean for landlords?

Although it can seem like the commercial property sector being at a standstill is an awful proposition for commercial landlords, it’s not entirely the case. Lower interest in commercial developments means that the market becomes less saturated which in turn allows for higher commercial rent rates. 

If you have your own commercial property or are considering purchasing then it’s vital you are receiving the correct advice, particularly in a down market. Let us show you how commercial real estate is still a strong Irish investment.

Property Managers Dublin

For almost 25 years KPM Group has been delivering the highest standards in Property Management. 

We act for private investors, lenders, as well as domestic and international funds. Sectors of expertise include Private Rental, build-to-rent projects, owner management companies, Local Government agencies and best-in-class Social Housing developments.

With the property market begging to stabilise, now could be the ideal time to start or increase your property portfolio. For advice on what to buy and how to increase your rental income, then contact our experienced team today.