Property Management – JLL Ireland’s annual property outlook briefing took place in Dublin recently. The property advisors delivered snapshot updates on office, retail, industrial, residential, hotel and investment markets and also included a focused presentation on sustainability. They also welcomed guest speaker, Michael Guerin from Smart Dublin who presented insight into new innovations and technologies across Dublin’s built environment. Office demand is expected to continue to remain strong, although supply issues could become apparent in the next 12 months with limited choice for occupiers. Whilst there is significant construction underway, the trend for pre-lets continues, with limited new and vacant space delivered to the market in the next 12 months. JLL Ireland expects office rents to remain steady with landlords wary of Dublin’s rents becoming too expensive compared to other comparable European cities.
The retail market will continue to perform, underpinned by strong consumer spending. Ecommerce, however, will continue to disrupt the sector. The impact of this is now shifting from retailers to real estate, with supply chains becoming more complex to allow goods to be delivered quickly to consumers. The industrial and logistics sector will perform well in 2020. Although there is some clarity on a Brexit outcome, there are still a lot of issues which impact the logistics sector, such as tariffs and barriers that still need to be worked out, so demand may be impacted by this in the next 12 months. In addition, supply remains an issue, with caution around development activity expected in 2020.
There remains a critical issue with housing supply across all of Ireland and across all residential sectors. The government needs a brave and holistic response to this in order to address the under supply and to ensure that Ireland remains a competitive city to live and work. Prices are expected to be broadly stable across sales and land sales, although rents are expected to increase. Affordability will therefore remain a significant issue, which may force some PRS activity to more suburban locations in the next few months.
Hannah Dwyer, Head of Research JLL, said: “2019 was a busy and active year for the property sector, despite external disruptions. As we head into 2020 with renewed enthusiasm and vigour we are expecting more of the same, with stability across all sectors. The two key themes we are expecting in 2020 are for the property market to focus more on sustainability and technology across each of the commercial and residential sectors. Investors, tenants and indeed society as a whole are showing greater emphasis on these two themes and it will have a fundamental impact on real estate. Those who show greatest agility to these are the most likely to succeed.”
Concluding the briefing JLL Ireland, CEO & Head of Investment, John Moran, said: “As with 2019, economics and politics will be the chief disruptor in 2020. Whilst we do have some clarity on Brexit, in the sense that we can be sure it is now happening, there are still many uncertainties left to work out, and I wouldn’t underestimate the time it is going to take for agreement to be made on some of the final details as part of Britain’s EU exit. In addition, we have our own uncertainty closer to home in 2020, in the form of a general election, not to mention the U.S. and OECD tax reform. With healthcare, homelessness and housing likely to be top of the agenda, we will have to wait and see what promises are made to voters as part of the political process. Hopefully these will not cause interference to the sector, but investors should be mindful of this in the next few months.”
Denise Maguire Editor of Irish Construction Industry Magazine