Positive outlook for commercial property asset types in 2025 – SCSI
A new survey from the Society of Chartered Surveyors Ireland has forecast a 1.4% rise in average prime office rents this year, with capital values rising by 1%.
The survey also predicts prime industrial values to rise by 3.2%, with prime rents set to increase by 3.1%.
The Society of Chartered Surveyors Ireland said this would mark a modest turnaround for the commercial property sector, which has been under significant pressure since the start of the Covid pandemic.
Meanwhile, when survey participants were asked what part of the property cycle the market was in, the largest cohort, 28% said early recovery, 19% said bottom of the cycle while 16% said mid upturn.
Arlene Maguire, Chair of the SCSI Commercial Agency Group, said the last few years have proved challenging for the commercial property market, but its latest report reflects a renewed optimism among chartered commercial surveyors in the sector’s resilience.
“The improved outlook suggests a potential stabilisation of the market driven by a combination of confidence in Ireland’s economic performance and a recalibration of space usage patterns to meet evolving tenant needs,” Ms Maguire said.
“Lower interest rates have also played a role with 45% of surveyors saying credit condition have improved slightly or significantly. This compares to only 7% in the fourth quarter of 2023,” she noted.
She said the commercial property market is driven by several factors including the health of the domestic economy, changes in the supply/demand dynamic across the three main property types and inward investment.
“While there is a general level of well-founded optimism in the Irish market this could be upset if trade tariffs are introduced in the near future by the US. So that threat will continue to cause a high level of uncertainty,” she cautioned.
Today’s survey reveals that for prime industrial properties, 61% of surveyors expect the capital value to increase and 67% anticipate an increase in rental values.
But for secondary industrial properties, only 36% expect capital values to increase, and 39% expect rental prices to rise.
A significant portion, 44% for capital and 50% for rental, expect prices to remain the same.
45% of surveyors expect that the capital value of the prime office will increase, while 38% expect it to remain the same, and 19% expect it to decrease.
In terms of rent for the prime office, 46% of surveyors anticipate an increase, while 39% expect the rent to stay the same, and 17% expect it to decrease.
Regarding secondary offices, 82% of surveyors expect the capital value to remain the same or decrease, while 81% anticipate that rental prices will also stay the same or fall.
For prime retail spaces, 36% of surveyors expect capital values to increase in 2025, while 43% anticipate an increase in rental values. However, 49% for capital and 45% for rental, believe these values will remain the same.
In contrast, for secondary retail spaces, 36% of surveyors expect capital values to decrease, along with 36% expecting a decrease in rental values. A majority of 49% for capital and 52% for secondary retail rental expect the values to remain the same, today’s survey shows.
Article Source – Positive outlook for commercial property asset types in 2025 – SCSI – RTE
