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Pre-Budget rush on commercial property

Monday, September 01 10:25:31

The next few months will likely see a big rush by investors to buy Irish commercial property ahead of the Budget, which is expected to phase-out the Capital Gains Tax (CGT) waiver.

Commercial property consultants CBRE Ireland's latest bi-monthly report says activity in the Irish property sector has continued at pace over recent months. It noted an exceptionally busy July and August in many sectors of the market and a very active Autumn selling season now in prospect as a number of high-profile portfolios and assets are launched for sale.

CBRE anticipate an escalation in activity over the coming months as vendors rush to release assets for sale to give purchasers enough time to complete transactions by the end of 2014 to avail of the Capital Gains Tax (CGT) waiver that is expected to be phased out in the forthcoming Budget.

According to the author of the report, Marie Hunt, Executive Director and Head of Research at CBRE Ireland, said the sector has been exceptionally busy of late.

Irish commercial property achieved a total return of 8.5pc in Q2 2014 - the highest quarterly return achieved since 2006. The annual return to the mid-year point was 26.6pc with the office sector achieving an annual return of 33pc in the period.

Dublin recorded the 7th highest volume of investment activity in the EMEA region in the first six months of 2014 - its first time to appear in the Top 10 ranking since 2006.

"Deal flow in the Irish commercial property market has been phenomenal over recent months, with activity even continuing at pace during the Summer months when the market is typically quiet. Indeed, there has never been a busier July and August in the Irish investment market or the hotels and licensed sector of the market than experienced in 2014 with transactions being completed right throughout the Summer and several portfolios and assets launched for sale in this period. Capital is emanating from a variety of sources and a range of different jurisdictions with investors encouraged by improving economic forecasts, recent upgrades from various rating agencies, strong rental growth prospects in the various occupier markets and the arbitrage between yields and prevailing bond rates. A very busy Autumn selling season is now in prospect, fuelled to some extent by the anticipated ending of the Capital Gains Tax waiver later this year," said Ms Hunt.

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