Each year, at this time of year, I write with a nod to a classic film, a lens to capture the mood of the market. With the recent passing of Robert Redford, the imagery of Butch Cassidy and the Sundance Kid feels particularly apt.
Throughout the film, as the protagonists flee their relentless pursuers, they grow increasingly frustrated when every attempt to throw off the trackers proves futile. There’s a certain resonance for the market. Throughout 2025, just as we seemed to pull ahead of one bad news cycle, another would appear, eroding confidence and sentiment alike.
Fortunately, the ending for this year will differ from the film. The market is not fading away, and its conclusion will not be ambiguous. After a prolonged period of uncertainty, five years at my last count, the foundations for the year ahead are taking shape.
A mixed year, but optimism is building
RM Block
While the market’s performance across 2025 was uneven, the third quarter marked a decisive change in direction, with improved sentiment. During Q3, €699.5 million was transacted in 32 deals across various sub-sectors of the commercial property market, an 80 per cent increase in volume from Q2’s €389 million, and a 52 per cent rise in the number of transactions.
This brought Irish investment volumes for the first three quarters of the year to approximately €1.63 billion. Although still below long‑term averages, this represents a clear improvement on the €1.27 billion recorded in the same period last year and signals growing confidence as macroeconomic uncertainty begins to ease.
Forecasting full-year volumes can be tricky in Ireland’s relatively small market, where large one-off deals often distort overall figures. Nonetheless, we anticipate 2025 volumes to fall in the range of €2.2 billion to €2.5 billion, with the total number of transactions reaching about 110.
This acceleration aligns closely with trends across EMEA, where investment volumes reached €143 billion through the first three quarters of 2025, up 18 per cent year-on-year, though still 17 per cent below the 10‑year average. Lower interest rates, with the European Central Bank now close to equilibrium at 2 per cent, have helped stabilise financing costs and restore liquidity. Institutional capital is returning, debt availability is strengthening, and demand for prime assets remains firm.
This renewed activity is underpinned by strengthening asset fundamentals, with the JLL Irish Property Index reporting a 2.6 per cent annual increase in capital values and the sixth consecutive quarter of growth, confirming that rising transaction volumes are being matched by firming valuations across sectors.
Housing poised to become the most active sector by decade’s end
After years of housing policy focused on market controls and government-led provision, the State has reframed housing as part of Ireland’s core infrastructure. The Government will commit a record €275 billion of investment over the next decade, and it is positioning investors and developers as essential partners in delivery.
The language of the released plan reflects that used for major infrastructure projects such as transport and energy. It describes housing as requiring significant investment in water, energy and transport, alongside tax incentives, zoning reform and streamlined planning systems. This deliberate policy shift recognises that solving Ireland’s housing crisis depends on mobilising global capital and creating long-term certainty for investors rather than relying solely on public expenditure.
As a result, we can now say that the housing or “living sector” will soon move from an emerging investment class to the cornerstone of the Irish real estate market. By the end of the decade, living assets will be the country’s largest investment category. Ireland’s strong urban growth, structural undersupply and the new policy environment, which treats housing as infrastructure, make it one of Europe’s most compelling growth markets.
Private investors are increasingly looking beyond traditional real estate toward infrastructure, attracted by stable, inflation-linked returns and clear policy direction. With housing now recognised as core national infrastructure, investment in energy, transport and utilities is increasingly viewed as complementary to the living sector.
The same structural forces driving residential demand, such as urbanisation, decarbonisation and the need for grid capacity, are reshaping capital flows across Ireland and Europe. For investors, this convergence between housing and infrastructure represents a long-term opportunity to participate in building the physical networks that will sustain Ireland’s growth and support its transition to a low-carbon economy.
The office challenge, from obsolescence to opportunity
Office investment remained muted through 2025, with limited transactional evidence available to benchmark prime pricing. This is expected to change in 2026 as improved sentiment and stabilising financial conditions bring prime assets and investors to the market. Beneath the sector’s surface, leasing performance has signalled renewed confidence.
‘Industrial investment totalled €157 million through Q3, marking a cooling-off period after the pandemic-driven surge that peaked at €991 million in 2021′
Dublin recorded one of Europe’s largest leasing transactions of the year when Workday committed to 416,000sq ft at College Square in Dublin 2, and Q3 2025 delivered the strongest quarter for leasing transactions since 2018. One million sq ft of vacant space was removed from the market, while Grade A+/A availability fell by 20 per cent over the past year, highlighting the depth of demand for high‑quality space. Smaller floor plates remain the most active segment, with deals below 10,000sq ft accounting for 72 per cent of transactions, indicating broad‑based engagement from occupiers.
While leasing fundamentals are strong, the sector faces a structural challenge. An estimated 60 per cent of Dublin’s existing office stock is at risk of functional obsolescence by 2030, unable to meet the energy efficiency, technological, and experiential standards expected by today’s occupiers. With construction pipelines virtually non‑existent after 2027 and developer appetite constrained by costs and planning uncertainty, repositioning and retrofitting will be critical to unlocking value. As new supply tightens, demand for modern, sustainable workplaces will intensify, placing a growing premium on upgraded assets.
[ Investment in Irish commercial property totals €394m in second quarterOpens in new window ]
For owners, investment in adaptability, building systems and sustainability alignment is now even more of a strategic imperative. JLL research indicates that medium retrofits can deliver energy savings of 25 to 40 per cent, while deep retrofits can exceed 60 per cent and attract rental premiums above 5 per cent. The market is entering a decisive phase. Next year will reward proactive reinvestment and penalise inaction. Assets that fail to evolve will see values erode as capital and occupier demand converge on modern, energy‑efficient space.
Retail and industrial remain resilient
Retail and industrial have shown contrasting yet compelling investment dynamics in 2025. Retail investment reached €532 million in the first nine months, sustaining momentum from 2024’s strong performance of €1.04 billion. Retail parks dominated activity, with €355 million transacted, supported by robust rental growth, healthy consumer demand and resilient footfall in regional locations. Regional shopping centres are also attracting continued interest, as investors identify value cash-on-cash opportunities driven by rental reversions and improving occupancy.
Industrial investment totalled €157 million through Q3, marking a cooling-off period after the pandemic-driven surge that peaked at €991 million in 2021. This slowdown reflects limited market opportunities in the first half of the year, rather than the sector falling out of favour. The depth of the sector is currently being tested with nearly €800 million of assets for sale. Fundamentals remain exceptionally strong: vacancy rates hover at about 3 per cent, rents have reached record highs with further growth potential, and pipeline supply is constrained, with only 1.4 million sq ft under construction.
Both sectors are well positioned to benefit from structural economic shifts. Retail parks offer defensive income characteristics, while industrial assets provide exposure to Ireland’s strategic logistics role, e-commerce expansion and last-mile delivery infrastructure. For investors seeking diversification beyond offices, these sectors present compelling risk-adjusted returns and the potential for sustained performance into 2026, particularly for those targeting income stability and growth in supply-constrained markets.
2026 and beyond
As 2025 concludes, Ireland’s real estate market is transitioning from uncertainty to renewed confidence. Values have steadied and started to climb, signalling a shift back toward fundamentals‑based investing and a build‑up of market momentum.
John Moran is chief executive and head of capital markets at JLL Ireland
