Irish commercial property bubble on horizon, claims John Moran

on Apr 7, 2015
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John Moran, Director of Jones Lang LaSalle estate agents has warned that Ireland could be heading for another commercial property bubble. “Are we at the bubble stage? Not just yet. Am I concerned that we might be getting there? Quite possibly”, he told the Oireachtas Banking Inquiry.

Moran went on to state that the cost of office accommodation in Dublin is reaching an unsustainable level, citing this as being a warning light that is currently flashing for the Irish commercial property market. Rents for office space in the capital are currently at €50 – €55 per square foot and these prices are of a similar level to those seen in 2005, two years before the peak of the property bubble of 2007.
Jones Lang LaSalle was joint agent for the sale of the now infamous Irish Glass Bottle site in Dublin towards the end of 2006. The property was sold for €412 million, leading some to speculate that this particular sale contributed to the boom-bust cycle of the Irish property market at that time. Noting that his job at the time was to maximise the sale price, Moran told the banking inquiry that he would not apologise for the sale of the site “for one second”
Moran claims town planners are as much to blame as the banks in adding further fuel to the property boom, with what he called “extraordinarily lax” decisions being made as towns tried to outdo one another with competing property developments. This, he believes, is what has led to unsustainability in the property market and ultimately, to the property bubble.
Marie Hunt executive director and head of research at CBRE Ireland claims that the country is probably mid-cycle right now, but agrees that there is without a doubt another property bubble on the horizon. She claims that interventions by the Government could minimise the impact of it. Commenting on the previous property crash in Ireland, Hunt said:
“Had robust, reliable, timely and accurate data been collated historically and reviewed in the context of a national planning framework the scale of the downturn in the most recent cycle may have been somewhat less severe”.

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