IRELAND Trends and Developments Contributed by: Diarmuid Mawe, Craig Kenny and Katelin Toomey, Maples Group
Emerging Trends in the Irish Commercial Real Estate Market The Irish commercial real estate (CRE) market has experienced significant challenges in recent years, driven by various factors, including eco - nomic conditions, regulatory changes and evolv - ing investor preferences. It demonstrated recov - ery and resilience throughout 2024, following a difficult period in 2023. 2024 was characterised by a significant rise in transactional activity, driv - en by better financing conditions and a more favourable macroeconomic climate. 2024 also saw an increase in investment volumes, reaching nearly EUR2.5 billion, marking a 21% increase compared to 2023. This upwards trajectory is expected to continue into 2025. This article will explore some of the key emerging trends in the Irish CRE market, with a particular focus on interest rates and financing conditions, ESG considerations and the new Planning Act 2024. Interest rates and financing conditions The European Central Bank’s interest rate cuts in June, September and October 2024 and March 2025 contributed to falling debt costs, aiding the recovery in transactional activity. Interest rates are expected to continue to decline in 2025, albeit at a slower rate, which will support transactional activity in the Irish CRE market. The availability of debt is expected to increase as lenders shift away from a cautious approach towards real estate. ESG considerations and the Recast Energy Performance of Buildings Directive Environmental, social and governance (ESG) considerations have become increasingly impor - tant in the CRE market, and the focus on sus - tainability is evident across all sectors. Inves - tors, tenants and regulators are placing greater
emphasis on sustainability, social responsibility and good governance practices. This trend is reshaping the way commercial properties are developed, managed and valued. The adoption of green leases and compliance with ESG-focused legislative requirements are increasingly becoming the standard, ensur - ing that real estate portfolios are safeguarded against changing market conditions, legislative change and regulatory requirements. The social element of ESG is also becoming increasingly important. Some large Irish ESG- focused companies are expected to begin vol - untarily reporting on their social impact in order to display their ESG credentials. While there is legislation requiring this in the UK, this is not currently the case in Ireland, but it may come down the tracks if voluntary reporting takes off. The “G” in ESG is often overlooked, but it is fun - damental as an organisation’s internal policies and procedures shape the impact that organisa - tion has from an environmental and sustainability perspective. The most important piece of legislation in the ESG area for the Irish CRE market is the Recast Energy Performance of Buildings Directive (EPBD), which entered into force in May 2024. The EPBD is to be transposed into national law by May 2026, and heads for the Irish Energy Performance of Buildings Bill are currently being prepared. The EPBD introduces significant changes, notably the introduction of the Zero- Emission Building (ZEB) standard and Minimum Energy Performance requirements. A ZEB is defined as a building with exceptionally high energy performance, where a substantial portion of its energy needs are supplied by renewable sources, ideally generated onsite or nearby. This
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