Irish Retail Warehouse Values Surge Amid Broader Market Struggles

The value of Irish retail warehouse properties experienced a notable recovery in the second quarter of 2025, driven by substantial transactions in the sector. According to the MSCI/SCSI index, which tracks the performance of commercial investment property in Ireland, retail warehouse values increased by 3.1 percent, contributing to a 3.7 percent rise from the lowest point recorded in the same quarter of 2024. This growth is attributed to a 7.8 percent increase in rents within this segment, alongside significant investments from US firm Realty Income Corporation, which acquired two portfolios for €343.5 million.

The acquisitions included eleven retail parks, such as Belgard Retail Park in Tallaght, Dublin, and Parkway Retail Park in Limerick. While retail warehouses gained traction, other retail sectors showed signs of stagnation. Capital values for shopping centres fell by 0.4 percent in the second quarter and decreased by 1.3 percent over the preceding twelve months. Notably, rents in Dublin’s prominent shopping areas, Grafton Street and Henry Street, remained stable, with a slight increase of 0.7 percent each. However, capital values for these properties declined by 0.6 percent and 0.8 percent, respectively.

The office sector also displayed mixed results. Properties constructed before 2010 continued to lose value, while newer offices saw a modest growth of 0.7 percent. Overall office rents stabilized with an increase of 0.5 percent. A representative from MSCI noted a significant contraction in investment activity in Dublin during the first half of 2025, with a reduction of 63 percent compared to the same period in 2024. This decline caused Dublin to drop from fourteenth to twenty-second in a ranking of top European investment destinations.

In contrast, a separate index from JLL, based on a mixed-use property portfolio valued at €608 million, reported a 2.5 percent increase in returns for the second quarter, bolstering a 12-month growth of 7.6 percent. JLL Ireland’s chief executive, John Moran, stated that this marks the fifth consecutive quarter of positive growth in returns, indicating a solidifying recovery in the real estate market.

Industrial properties also showed resilience, with capital values increasing by 3.4 percent in the second quarter and 7.8 percent over the past year. This growth represents a shift from a previous downward trend that peaked with a 16.1 percent decline in the third quarter of 2023. Niall Gargan, a JLL representative, attributed this strength to ongoing supply constraints, robust demand from occupiers, and sustained rental growth, noting an annual increase of 9.4 percent in industrial effective rental values.

The JLL index also included residential properties, which exhibited a slight improvement with 1.2 percent growth in the first half of 2025, resulting in a 12-month increase of 0.5 percent. However, this growth lagged behind the performance of individual apartments, which saw prices rise by 6.7 percent year-on-year in the second quarter of 2025, according to the Geowox Housing Market Report.

The contrasting trends within the Irish property market highlight a complex landscape, where retail warehouse properties are leading the recovery while other sectors remain challenged.