“While volumes in the Irish market have been robust in the year-to-date, exceptional one-off sales have driven spend materially higher than in 2021,” said Colin Richardson, head of research at CBRE Ireland.
“The office and residential sectors continue to attract the bulk of investor interest. However, the dynamics of the Irish investment market continue to shift, in-line with global macroeconomic headwinds, which are negatively impacting sentiment. With interest rate increases and rising debt costs, we are beginning to see yields come under pressure. This is likely to be reflected in the final quarter of the year”.
In a separate report on Wednesday, property advisor and investment manager JLL Ireland said that investment volumes were relatively healthy throughout the quarter, albeit “within a cloud of increasing investor hesitancy” due to rising interest rates. “The increasing cost of debt is beginning to impact underwriting, yields and returns,” the company said and it is anticipated that the final quarter of the year is likely to be characterised by “reduced liquidity” and reduced bidding intensity.
John Moran, chief executive and head of capital markets at JLL Ireland, said that while third quarter volumes were encouraging, particularly in the office, residential and alternative sectors, there is “a high degree of uncertainty” within the market heading into the final three months of the year due to “rising bond yields and interest rates”.