The final three months of 2023 was the slowest final quarter for “well over a decade” for investment property in Ireland, according to BNP Paribas Real Estate Ireland.

Overall, turnover of €1.85 billion in 2023 was down almost 70% from the previous year.

Only 114 deals were done during the year – well below the ten-year average of 223.

Writing in the firm’s latest report on the investment-property market, John McCartney (director and head of research, BNP Paribas Real Estate) said that the year had “petered out with a whimper”.

Smaller deals

While the final quarter of the year usually accounts for around 37% of turnover, deals worth just under €435 million in Q4 last year accounted for just under a quarter of the 2023 total.

McCartney attributed the weakness in the market to a number of factors – including the trend towards remote working, a “reset” in the technology sector, a weaker economic backdrop, and higher interest rates.

The report shows that only 25 deals worth €20 million or more took place last year – the lowest number since 2013.

2024 outlook

Offices accounted for just over 20% of total investment last year, overtaken by the logistics sector (28%) and retail (22%).

On the outlook for 2024, BNP Paribas says that occupier market conditions, especially in the office sector, “may get worse before they get better”.

It adds, however, that the prospect of interest-rate cuts may help the market later in the year, while it also expects forced sales to increase as the year goes on.

“Clearly this is painful for the parties involved but, as it provides pricing transparency, it should create more liquid trading conditions in the market,” the report concludes.