Commercial Property outlook ‘upbeat’

The prospects for the Irish commercial property market are more positive than any time over the past five years, according to Nama chief executive, Brendan McDonagh.

“Because of the 65% drop in prices over that period, commercial property valuations, particularly for office and industrial investment, look attractive and yields of over 8% must now be compellingly appealing to potential investors at a time when five-year euro government bond yields are 3% or less,” he said.

Mr McDonagh said that the changing perception of Ireland among international investors is helping underpin a tentative recovery in the market. “Our recent experience is that many of the investors who turned away from the country four or five years ago are now returning with an interest in investing in Irish debt and Irish property assets.”

Moreover, there is a growing demand for office space in Dublin.

Nama will make available €2bn in vendor finance over the next four years to potential buyers of commercial property assets — a significant chunk of which are located in Ireland. Total investment in the commercial property market in 2011 was just €200m, he added.    Irish Examiner