All Eyes On Final Quarter 2020 Market Performance
A quick glance of the Business headlines and some of the most recent quarterly Commercial Property reports provides a mixed view in terms of Commercial Property activity levels and market performance during the last few months.
- Irish Q3 Investment turnover close on €700 million which compares reasonably well with Quarter 3 five year average.
- Strong demand from International funds seeking PRS and Office Investment opportunities in Ireland.
- Traditional Retail Sector continues to struggle with increasing vacancies and falling rents.
- Q3 Office Leasing activity gathering momentum and increasing by over 120% on Q2.
- Sub €20 million Investment market coming under renewed pressure due to Covid.
- Property Week UK headlines “Office deals starting to pick up during October in London”.
- Leading Irish Property REIT reporting strong rent collections on their Commercial and Residential portfolios to year end 2020.
If Q2 was classified as a type of market suspension, then Q3 can be described as a market warm up, with all eyes fixed on activity and performance levels during the final quarter. With close to €1.5 billion of Commercial Investment property on the market (over €650 million on Propertylocator.ie) and more substantial Property portfolios and product available off market, many within Property and Business communities will be making a major push to close deals before year end.
Seldom before will Q4 Commercial Property activity levels be more closely watched.
Given the most recent introduction of Level 5 restrictions throughout Ireland, combined with the second Covid-19 wave throughout Europe and the current uncertainty surrounding Brexit, it would be prudent to remain cautious on final Q4 market projections for 2020. Nevertheless Investment Property transactions will continue both on and off market as both National and International Investors chase returns in this negative interest rate environment with the Private Rented Sector (PRS) and prime Office Investments expected to dominate the market come year end.
The total amount of Investment deals completed to end of September was coming in just below €2 billion and much now will depend on the traditional final quarter push if total property investment is to hit the €3 billion mark. Too early to call and only time will tell when the final whistle blows at end of Quarter 4.
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