After a challenging period of adjustment, Ireland’s investment market is showing clear signs of stabilisation, and there is now a more optimistic outlook for the coming year. Pricing has largely bottomed out; investor confidence is growing, and most notably, the conversion rate of sales launched to successful completion has improved significantly.
While 2025 didn’t quite deliver the rebound in overall transactions that many expected, deal levels were solid, with total investment of €2.4 billion expected across the market for the year. This is largely in line with 2024, but growing interest from institutional capital became evident as the year progressed.
Strong economic fundamentals continue to support Ireland’s investment environment, a point reiterated at major European real estate events including MIPIM and EXPO REAL. The establishment and activities of the Ireland Real Estate Pavilion have also helped to put a spotlight on the opportunities in Ireland, an initiative that could deliver meaningful benefits in the years ahead.
Private rental sector (PRS)
The “living” sector is expected to be the most invested sector in Europe this year, accounting for more than 25 per cent of all capital deployed. And after several years of relative illiquidity in Ireland, largely driven by regulatory constraints, private rental sector investment experienced a rebound in the second half of this year and is poised for a significant increase in volumes in 2026.
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We believe that recent policy changes, including long-overdue rent-regulation adjustments, should act as a catalyst for more investment, while the reduction in the VAT rate on apartment sales, and reportedly on forward sales, will also be supportive. Indeed, we are forecasting yield compression of 25 basis points on prime rental sector properties in 2026.
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In the third quarter of this year, CBRE closed the sale of Spencer Place in the north docklands, which we believe is a landmark transaction that marks the start of renewed confidence in the sector.
Offices
The Dublin office occupational market continues to recover, providing a better case for investment. CBRE’s guideline prime office rents are forecast to reach €70 per sq ft by the end of 2026, based on the increased competition for a smaller number of modern city-centre buildings.
While core investment has been relatively limited over the past few years, we are now seeing some encouraging signs for 2026. At the same time, secondary office buildings have attracted consistent interest in the last two years, with acquisitions by French funds and high-net-worth family offices highlighting the appetite for core-plus and value-add opportunities.
This year, CBRE advised Kennedy Wilson on the sale of 10 Hanover Quay and 20 Kildare Street to Pontegadea and Deka, respectively, two transactions that signalled there is underlying demand for core office assets in prime Dublin locations.
Real estate finance
In the debt markets, while reference rates have now stabilised at more elevated levels than pre-2022, finance costs are more competitive now than at any point over the past three years. The depth of liquidity from banks and alternative lenders means increased competition for financing opportunities, which results in more competitive rates for borrowers. Leverage being accretive is key to unlocking investment activity and this is now the case for most sectors.
Outlook for 2026
There are early signs of a robust pipeline of assets coming to market in the next 12 months, driven by a mix of large-scale residential transactions and a selection of both prime and secondary offices, alongside some large logistics portfolio sales.
With interest rates clearly at the end of their cycle of cuts in Europe, we expect a market next year with at least €3 billion worth of trades, and continued improvement in activity levels over the years ahead.
- Kyle Rothwell is an executive director and head of capital markets at CBRE Ireland
