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Property Watch Q2 2016

Highlights:

Housing
• Housing completions up 17% YoY
• New housing commencements up 33% YoY
• 2016 forecast is 14,000 completions
• Mortgage drawdowns for house purchase increased 24% QoQ
• Residential rents up 4% QoQ

Dublin offices

• Dublin prime office rents stable QoQ but up strongly in recent years
• Dublin office vacancy rates falling but significant variation with overall vacancy rates reported to be down to between 6.7% and 12% in Q2
• The supply shortage in the Dublin industrial market is expected to continue to push rent up in the second half of the year

Regional offices

• Take-up in the Cork office market around 4,000m² in Q2
• No take-up in Galway while activity in the Limerick market remains subdued
• Prime rents were highest in Cork at €290/m², less than half the corresponding level in Dublin
• Prime rents are lower in Galway at €220/m² and lowest in Limerick at €172/m²

Property investment

• Investment turnover in Q2’16 reported to be the largest quarterly turnover on record at around €2.2 billion

Impact of Brexit

Mixed reports on impact of Brexit:
• Should positively affect Ireland’s attractiveness for FDI
• Will affect some industrial occupiers in the short term especially if they are exporters to the UK
• Less investment may be forthcoming from UK investment companies and financial institutions, which could jeopardise development projects relying on non-domestic sources of finance
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