Investment activity in the Irish property market reached a new low of €163m during the first three months of the year as the office market continues to see high vacancy rates, a new report from property group Sherry Fitzgerald has found.
The report said that between January and March, the investment market remained “very subdued” with only 20 investment sales closing during that time representing a decrease of 35% compared to the same period in 2023.
Retail assets transactions were the main driver of investment during this period — accounting for 42% of the total spend — whereas office investment accounted for just 7%.
The office market continues to see high vacancies as companies reduce space requirements due to remote working and downsizing in the tech sector.
Residential property assets accounted for 27% of the total property investment while mixed-use properties accounted for 18%.
Sherry Fitzgerald also noted that there were no transactions valued at €50m during the three-month period, the first time this has happened since the summer of 2017.
Higher interest rates by the European Central Bank have dampened transaction activity over the last few years with just €1.6bn being spent on investment properties in the year to the end of March, compared to the €4.5bn spent in the prior 12-month period.
The ECB is expected to begin cutting rates in June which the report notes may impact activity as investors hold off on larger transactions until lending conditions improve.