The latest CB Richard Ellis property report, just released, has reported sustained levels of growth this year to date, allaying some of the uncertainty about what 2008 would hold, writes Oonagh Reidy.

On the housing front, strong buyer activity has been reported on new housing launches in developments including The Meadows in Swords, Hazelbrook in Celbridge and the well publicised of Adamstown Square (Phase II), West Dublin.

It predicts healthy activity in the sector for 2008, with good value deals, lower prices and lower interest rates all likely to feed demand. Housing completions are still set at the 50,000 mark for the year.

On the commercial front, demand has remained buoyant for the first two months of this year, despite worries demand would be hit by recent events in the financial sector, although the report does states occupiers are being more ‘precise’ with regards their future needs.

However, recent requirement for additional space of 50,00 m2 which includes financial institution Citco, are cited as evidence of sustained growth in the office sector, whilst Bank of Ireland and Caledonian Life are also seeking new accommodation, ahead of expansion plans.

On the retail front, strong profitability has been reported by the major names, many of whom have put their money where their mouth is, planning several new store openings over the next few years.

The movers and shakers include Dominos Pizza, whom intends to double in number their current 34 stores, whilst Marks and Spencer’s are to unveil new stores in Limerick, Killarney and Ranelagh. A brand new 16,000 m2 retail park is also planned for Navan, Co Meath, construction on which is set to commence shortly.

In relation to the investment sector, Irish investments in the UK hit the €4.7bn mark last year, half of which was concentrated in the zone around central London. Although this year is not predicted to be as strong for transactions across the water, some notable acquisitions have already been made by Irish investors including the acquisition of 10 Queen Street Place in London for £169 million and 116 Old Bailey in London’s EC4 district for £71 million.

With regards transactions within Ireland, the lending restrictions by banking institutions has precipitated a slowdown in activity, although the report has dismissed the UBS findings that returns could decline by up to 30% this year.

In fact, despite the slowdown, prime yields have moved out 25 basis points in the past two months. Recent purchases of note included the €100 million sale of the Gaiety Centre on South King Street in Dublin, Cork’s Eastgate Business Park, recently acquired by Royal Liver for a price of €7.1 million, as well as the sale of the Droichead Beag bar in Dingle, Co Kerry for €3m.

The report also foresees some of good investment opportunities coming on the market in the coming months, which may prove the ultimate litmus test of the strength of the market. However, as ever, activity will still be heavily dependant on the cost of funding.

Click Below to View Report in Full