Prime commercial property rents in Dublin will increase by more than 4% in 2017, according to fresh research by Cushman & Wakefield.

A fresh report by Cushman & Wakefield Research, the commercial partner of the Sherry FitzGerald group in Ireland, found that investment in the Irish commercial property market rose 21% year-on-year to reach an impressive €4.46bn (£3.94bn) in 2016, supported in part by 4.6% rental price growth last year, the company said.

The report predicts that rents will rise to €646sqm (£571sqm) this year, up from €619sqm (£547sqm) at the end of last year.

Rental price growth in the Irish capital is being fuelled partly by strong employment growth and FDI investment, suggesting that 2017 will be another good year for the retail investment market.

Cushman & Wakefield forecast that total investment transactions are anticipated to be in the order of €3b (£2.65bn) in 2017, with a strong volume of re-trades from early entrants into the market.

Furthermore, the positive outlook for economic and employment growth bodes well for occupier demand in the office market, most notably in Dublin but also in the other regional centres.
 
Commenting on last year, chief economist at Cushman & Wakefield, Marian Finnegan, said: “2016 was a very resilient year for Irish commercial property. Overall investment volumes were incredibly strong with notably €3bn invested directly by US and European investors. It was also a significant year for the Dublin office market, both in terms of occupation levels and in terms of development.

She added: “Notably, there is an additional 373,000sqm of office space under construction in Dublin today, of which 230,000sqm is expected to be completed by end 2017. This is critically important to satisfy demand pressure and stabilise rental growth.”