CB Richard Ellis, the international commercial property agents, said today that the the first six months of 2009 represented an unprecedented period in the Irish commercial property investment market with very little transactional activity recorded as curtailed bank funding and a lack of clarity regarding values had a severe impact on investment activity. Only €41.6 million was invested domestically in H1 2009.

CBRE said Irish commercial property values have declined very significantly in the last 12 month period with most of the adjustment occurring as a result of rapid yield adjustment in the latter half of 2008 in response to a lack of debt funding.

The first six months of 2009 have been difficult but CBRE says it is beginning to see some engagement between buyers and sellers in the Irish investment market, considering the very significant value adjustments that have taken place. It expects to see a small number of transactions concluded in the second half of the year with international investors increasingly interested in investment opportunities in the Irish market.

In a report issued today, CBRE says having increased very significantly in the latter half of 2008 and in the first quarter of 2009, yields (for prime properties at least) appear to be stabilising in the Irish market, albeit there is limited transactional evidence to support this.

The report says Government proposals to ban upward only rent reviews will have huge implications for the Irish investment market. The proposed legislative change will essentially create a two-tier market, impact negatively on values and funding and put Ireland at a distinct disadvantage relative to the UK property investment market, while doing nothing to assist the occupiers who are currently struggling to meet rental payments, according to CBRE.