Our high level take on the commercial real estate market following our trip to EXPO REAL (Messe München).
There is value in commercial real estate across mainland Europe. For instance, we were quoted 7.5% for prime office in Lyon or 6.5% for prime logistics in Poland. This makes Ireland uncompetitive right now for the pan European institutional investor, who has money to spend, which is affecting performance in our market. There was no evidence of a ‘wall of money’.
Investment assets therefore either need to get more expensive on mainland Europe or cheaper (higher yielding) in Ireland, in order to attract the institutional investor back into our market in the short term.
For the Indigenous Irish investor, expect a little more value to come into the commercial real estate sector in 2024, particularly in legacy unsustainable asset classes requiring upgrades. However, important to emphasise that we in QRE Real Estate Advisers still see strong demand and pricing for well-located secure investments in the sub €10m sector.