A comprehensive Outlook 2024 annual report has been released by commercial property specialists CBRE, containing predictions for each sector of the Irish property market in the year ahead.
The property consultants note that while there will be some continued challenges, there is also exceptional opportunity in commercial property over the next 12 months, as yields and pricing start to bottom out and financing costs decline.
The report indicates that the hotel market remains an undersupplied sector.
‘Digitalisation And Sustainability’
“Valuation declines were the key theme running through real estate markets in 2023, but base interest rates have stabilised and are likely to decline over the course of the next year, which should be positive for valuations and transactional activity,” said Colin Richardson, director and head of research at CBRE.
“Digitalisation, sustainability, and the adaptive reuse of older buildings are all key themes in this year’s report.”
Hotel Occupancy Rate
In the year to date to November, Dublin achieved the highest hotel occupancy rate out of 35 European markets, according to data published by STR.
Dublin also ranked seventh highest in terms of revenue per available room (RevPAR).
Potential Record Year
Total hotel transaction volumes in 2023 in the Irish hotel market were €240 million, with a further €75 million of hotel development site sales.
When considering the number of ongoing high-value sale processes, CBRE predicts that hotel transaction volumes will be significantly higher in 2024, potentially with a record year of sales in store.
Undersupply Of Beds
Yields for prime-leased hotels are now stable, as opposed to the wider property market, where asset-pricing is largely trending weaker.
CBRE predicts that hotel trading performance will likely remain strong in 2024, given the undersupply of beds in the market.