The commercial property market is becoming “increasingly quality driven”, as office occupiers “are prepared to pay a premium” for premises that satisfy environmental, social and governance (ESG) principles, chartered surveyors have said.
“ESG and workplace quality are now key drivers of demand, with occupiers increasingly seeking sustainable, healthy and amenity-rich buildings,” the Society of Chartered Surveyors Ireland (SCSI) said in its midyear commercial property market monitor report.
The report found three in four commercial and valuation surveyors “expect occupiers to be willing to pay more for these facilities, highlighting the growing importance of workplace experience, sustainability and employee wellbeing”.
It forecast an average rise of 6 per cent in rents for prime office space and a 4 per cent gain in their capital value over the coming year. SCSI projected an average increase of 4 per cent in rents for industrial assets, with their capital values expected to be up 3 per cent.
While the expected growth is “moderate”, there is “a clear divergence between primary and secondary assets”, the report said, with a stronger outlook concentrated in higher-quality assets.
Bernadine Hogan, the chairwoman of the society’s commercial agency committee, said “this trend has been the most profound development in recent surveys, as it further broadens the market divide between primary and secondary assets on the Irish commercial market.
“Across the commercial property market, the first half of 2026 has been characterised by growing occupier confidence and a gradual recovery in investment activity,” she said.
The supply of commercial property across the State “generally remains constrained”, the report noted, “as available space continues to decline and development activity remains subdued across major cities”.
Respondents to the survey identified “strong growth prospects across alternative real estate sectors”, with a particularly positive outlook for data centres, student housing and aged care facilities.
Data centres “benefit from strong underlying demand for digital infrastructure”, the report added, although the growth outlook “is increasingly shaped by Ireland’s energy infrastructure and policy environment”.
Hogan added the “positive outlook for alternative assets” is partly thanks to their reputation as “offering long-term income stability and diversification beyond traditional commercial property sectors”.
The market entered the second half of the year “against a backdrop of resilient domestic economic activity” such as growth in employment, investment and household spending, the report continued, “although heightened geopolitical uncertainty continues to influence the outlook”.
It cited data from the Central Statistics Office demonstrating the year-on-year 4.1 per cent decline in the volume of annual construction, “highlighting continued challenges in bringing forward new commercial development”.
“Higher construction costs, financing costs and planning delays have slowed the commencement of new projects,” Hogan said, adding: “While some schemes are progressing, the development pipeline remains relatively shallow, particularly in the industrial sector.”