94% of Irish CEO’s expect Dublin commercial property values increases over the next 3 year period while 65% anticipate further house price increases in the capital

Dublin, 18th December 2013 – Commercial property consultants CBRE today released the results of their annual survey of the Top 1,000 Chief Executives in Ireland. According to the survey, 88% of Irish chief executives are more optimistic about Irish economic prospects compared to 12 months ago while the same percentage (88%) believe that Ireland will be viewed even more favourably at the end of 2014.

Encouragingly, 98% of respondents to the annual survey expect Irish Gross Domestic Product (GDP) to increase in 2014 with more than two thirds of chief executives who responded to the CBRE survey expecting the Irish economy to grow by between 1% and 2% next year. Only 5% of respondents expect economic growth of more than 2% to be achieved next year. 70% of respondents expect Eurozone interest rates to remain at current levels next year while 22% expect a slight increase in interest rates in 2014. Only 1% of CEO’s expects a significant increase in interest rates in the Eurozone next year. 66% of respondents expect a slight improvement in the availability of funding for businesses and households next year with a further 28% of Ireland’s chief executives expecting no change in the availability of funding in 2014. When asked what issue had the most significant negative impact on economic activity in Ireland in 2013, the greatest majority of respondents cited the domestic economic banking crisis.

One of the more notable findings of this year’s survey was the extent to which Irish CEO’s have moved away from bank deposit as a preferred form of investment over the course of the last 12 months with both residential and commercial property proving considerably more attractive compared to last year. 76% of respondents say they are more favourable to Irish residential property over the last 12 months while 68% of respondents say they are more favourable to Irish commercial property than they were at the end of 2013. 53% say they are more favourable to equities compared to last year. Meanwhile, 85% of respondents say they are less favourable towards bank deposits compared to 12 months ago.

Almost half of respondents (48%) expect Dublin house prices to increase significantly over the next 3 year period while a further 17% expect house prices in the capital to increase slightly in the period. 8% expect no change in Dublin house prices over the next 3 year period while 27% are forecasting further price falls in the Dublin housing market. Outside of Dublin, respondents are more cautious about house price growth prospects. Although 68% of respondents are predicting increases in house prices outside of the capital over the next 3 year period, almost all of these are predicting only a slight increase in prices. 35% are predicting either no increase or further falls in house prices outside of the capital in the period.

Respondents were more upbeat about expectations for Dublin commercial property values than residential property prices over the next 3 year period. According to Marie Hunt, Head of Research at CBRE “94% of Irish CEO’s who responded to our 2014 survey expect Dublin commercial property prices to increase further over the next 3 year period. 51% of respondents are predicting a slight increase in commercial property values in the period with a further 43% predicting a significant increase. Not surprisingly, respondents are less bullish about values outside of the core Dublin market with just over half expecting an increase in commercial property prices outside of the capital over the next 3 year period and 33% of respondents expecting non-Dublin commercial property values to remain static in the period”.

When asked what sector of the Irish commercial property market was likely to achieve the highest returns over the next 3 years, 60% of respondents opted for Dublin offices with a further 27% of respondents opting for multi-family residential investments in the capital, which is perhaps not surprising considering the extent to which capital and rental values have appreciated in the Dublin market during 2013 and the current imbalance between supply and demand in both the occupier and rental sectors.

65% of respondents believe that the introduction of Ireland’s first REIT vehicles during 2013 will prove positive for the Irish commercial property market. 31% don’t believe that REIT’s will have any discernible impact on the market with only 4% perceiving their introduction in this year’s Finance Act as potentially negative for the Irish market.

81% of respondents to CBRE’s annual survey expect some rental growth to emerge in the Dublin retail market from current values in 2014. Meanwhile, 78% expect Dublin office rents to increase further year. However, respondents are less bullish about rental growth prospects in the retail sector with no-one predicting more than 10% growth in rental values in this sector next year. In contrast, more than a quarter of respondents are predicting office rental growth of between 10% and 15% in 2014.

More than three quarters of respondents say they will be increasing staff numbers in 2014, which is probably the most encouraging result to emerge from the annual CBRE survey.

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie./ni

CONTACT: Marie Hunt – 00 353 1 6185543 / 00 353 87 2727115 or e-mail:marie.hunt@cbre.com