* Says meaningful level of transactional activity in all sectors
* Number of properties due to come to market in coming months
* Occupier markets gets lift from foreign companies expanding
* Google secures new let near Dublin Port, Facebook looking
By Lorraine Turner
DUBLIN, Feb 29 (Reuters) - Ireland’s commercial property sector is creeping back to life thanks to the expansion of high-profile U.S. multinationals, banks starting to offload assets and a surge of international investors looking for prime property bargains, said CBRE.
Demand for properties, transactions and general activity across all sectors was buoyant in the first two months of the year, according to a report from the property consultancy, lifting hopes of a revival in the battered sector at the heart of the country’s economic and banking woes.
Irish commercial property prices have fallen by around 65 percent since their peak in 2007 and office rents have almost halved, prompting many tenants to seek better deals and helping kickstart activity in the occupier markets.
“There was a sense it might maybe start to die down, but what we’ve seen in the last two months is that there is no sign of that,” said Marie Hunt, head of research at CBRE in Ireland, told Reuters.
“There are more and more new requirements emerging all the time so we’re encouraged by that and (it‘s) fuelled to a very large extent by the corporate tax rate -- that 12.5 percent is really what seals the deal on a lot of cases.”
CBRE said it expects the office sector to continue performing well over coming months, fuelled by further foreign direct investment announcements.
Google recently secured a letting at a business park close to Dublin Port, while Facebook is looking for office accommodation to expand its operations in Ireland.
Britain’s dominant pay-TV group BSkyB is in talks to lease a building in Dublin after its announcement to create 800 jobs in Ireland while PayPal, a unit of eBay, confirmed its decision to lease accommodation in Dundalk with 1,000 jobs in the pipeline.
Ireland’s state-run agency NAMA expects commercial property prices to stabilise this year as it prepares to package assets into investment funds to tap growing interest from foreign investors, its chairman said this month.
A number of new properties are expected to come to market over the coming months, with banks, receivers and NAMA all looking to offload sites, said Hunt.
”There are quite a lot of products coming to the market. We’ll be watching to see if those assets sell and, more importantly, what pricing comes in at.
“(There is) a realisation these assets are not necessarily going to appreciate in value any time soon, and maybe you’re better selling now as opposed to waiting.”
International investors are also flocking back to Ireland after a year of uncertainty around “upward-only” rent reviews on commercial property leases left many waiting in the wings.
In December, the government dropped plans to amend leases --signed during the heady days of the “Celtic Tiger” economy -- that only allow rents to go up, and slashed stamp duty, prompting the return of many of these investors
“The ironic thing is, everybody seems to want the same thing. They’re looking for absolute prime retail/office premises, and a lot of that prime property is not being marketed for sale,” Hunt said.
Many of the investors are looking beyond Ireland’s current economic woes, albeit given that a referendum on Europe’s new fiscal treaty could create more uncertainty and be another concern for potential investors, Hunt added.
“What we’re hearing is that a lot of them think Ireland will be performing quite well in relative terms at that point (in 6-8 years) and that’s really their mark point, rather than focusing on today’s issues,” she said.
CBRE added a number of entities are considering bringing Irish loan portfolios to the market, and two significant office investment assets are under offer in Dublin.
These will be an important benchmark for pricing in a market that has been devoid of activity for two years, it added.