CBRE SAYS the Government has managed to restore “some confidence” in the commercial property investment market.

In a new report, the agency says a large number of overseas investors are seeking opportunities here now that the Government has confirmed it will not be proceeding with retrospective legislation on upward-only rent reviews. But there is a lack of prime product to satisfy demand.

Marie Hunt, head of research at CBRE, said a “number of entities” are considering bringing Irish loan portfolios to the market.

In the budget, the Government reduced the rate of stamp duty on commercial property from 6 to 2 per cent and introduced a capital gains tax waiver on all properties bought before the end of 2013 if held for seven years. The report claimed the change in stamp duty helped bring the IPD index of commercial property values back into positive territory in the last quarter of 2011, following 15 quarters of declining values.

The report said two significant office investments under offer – the Bord Gáis office at 1 Warrington Place being bought by Prudential and Riverside 11 in the Dublin docklands about to be sold to a German fund – would be pricing benchmarks. CBRE noted there had been an increase in the volume of relatively small development sites offered for sale in Dublin in recent months. Encouragingly, there was appetite from buyers for a lot of these.

CBRE said the office sector would perform well over coming months. There was also opportunistic lease regearing, with landlords seeking to extend lease terms and tenants making efforts to reduce their rents.