The Irish commercial property market enters 2026 with a solid foundation beneath it. While 2025 was not a blockbuster year for activity, it was one defined by resilience and recalibration.
Markets adjusted to global uncertainty, interest-rate movements and evolving occupier behaviour, yet across investment, offices, retail, industrial and development land, sentiment steadily improved. The fundamentals remain strong, and greater policy clarity is beginning to emerge.
Ireland’s performance now compares favourably to much of the UK and northern Europe, where higher political volatility, weaker gross domestic product growth and deeper structural imbalances have delayed recovery. In contrast, Ireland’s stable political environment, strong labour market and consistent economic outperformance provide a platform for renewed market activity.
Investment turnover for 2025 is expected to exceed €2.5 billion. Activity was constrained largely by a shortage of assets coming to market rather than weak demand. Well-capitalised owners held firm, reflecting confidence in long-term fundamentals. International investors stayed engaged but cautious as they waited for pricing clarity across Europe. That clarity is returning faster in Ireland than in the UK or parts of northern Europe, where slower repricing and political uncertainty have prolonged investor hesitation.
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Pricing visibility is improving and several investors who paused in 2025 are already signalling a return in 2026, driven by the State’s macro resilience and continued appetite for long-term income.
The living sector is set to be the main driver of activity next year, with turnover potentially rising by 30 to 40 per cent. Logistics will also feature strongly, with approximately €800 million of portfolios already at advanced stages of disposal.
The industrial and logistics sector remains exceptionally tight. Vacancy held between 1.8 and 2.1 per cent throughout the year, despite completions rising fourfold to 1.6 million sq ft. Significant portfolios, including the Henderson Park, Exeter and IPUT, attracted strong interest. Development remains challenged by new fire regulations, rising specifications and ongoing power constraints. Still, Ireland continues to be viewed as one of Europe’s most resilient logistics markets, benefiting from robust demand and sustained undersupply.
The development land market remained steady, with strong demand for well-located residential sites but limited availability. The planning system has shown modest improvement, helped by increased infrastructure funding and the establishment of the Housing Activation Office.
The revision of the National Planning Framework and the release of additional residential land by local authorities, including South Dublin County Council, mark a significant policy milestone. Reduced VAT for apartment construction should support viability, while the Residential Zoned Land Tax is prompting movement on long-dormant sites.
Reduced VAT on apartment construction is beginning to support viability, though challenges remain for higher-density schemes due to construction inflation, finance costs and infrastructure requirements. However, Ireland’s viability gap is narrowing faster than in the UK, where construction-cost inflation, planning delays and local authority funding constraints continue to suppress viability for urban apartment schemes.
Political stability is now essential. While the Government has taken steps towards greater clarity, particularly in planning reform and the articulation of long-term housing priorities, investors continue to seek stronger and more consistent policy direction. Certainty around tax treatment, planning outcomes, infrastructure delivery and investment frameworks remains critical. Ireland has made progress, but the market needs deeper stability and predictability to unlock the next wave of supply and capital deployment.
Challenges remain with judicial reviews, construction costs and infrastructure capacity among them, and these continue to influence viability and investment decisions. While the direction of travel is improving, further reform and greater clarity will be required to fully support supply, boost confidence and enable the market to function at its potential.
Ireland enters 2026 supported by strong demographics, a robust labour market and sustained foreign direct investment flows. These fundamentals reinforce the resilience of commercial sectors and position the market for a more active year ahead.
- Mark Reynolds is the managing director of Savills Ireland
