Irish Commercial Real Estate Outlook 2022

Before looking at what lies ahead we take a brief “look back” at some of the recent developments in commercial real estate.

• Housing continued to feature heavily with the Government publishing their Housing for All Strategy in September 2021 which will influence the legislative agenda in this area for the coming years. The Government also enacted a number of pieces of legislation to address the housing crisis:
  • The Land Development Agency Act 2021 which empowers the Land Development Agency to develop and regenerate relevant public land for the delivery of housing;
  • The Affordable Housing Act 2021 which gives effect to the Government's affordable housing policy and provides for the establishment of a new affordable shared equity scheme and defines ‘Cost Rental’ as a new form of tenure;
  • The Planning and Development (Large Scale Residential Development) Act 2021 replaces the previous Strategic Housing Development system with new streamlined arrangements for large scale residential developments (LSRDs);
  • Numerous pieces of residential tenancies legislation were enacted to strengthen protections for residential tenants. These protections include the introduction of caps on rent reviews in Rent Pressure Zones at 2% per annum on a pro rata basis where HICP inflation is higher, tenancies of unlimited duration and the requirement for annual registration of residential tenancies; and
  • The Government introduced stamp duty and planning measures to restrict the multiple purchase of houses and duplexes. 
• The Local Property Tax regime was amended, bringing many new residential properties within the tax net including newly constructed houses. 
• The law in relation to prescriptive easements had been due to undergo significant changes at the end of 2021 but speedily enacted legislation in November 2021 prevented the changes coming into effect. The Government has committed to carrying out a comprehensive review of the law in this area. 

What’s on the Horizon for Irish commercial real estate?

• The likely expiry of measures introduced in the last two years to address the impact of the COVID-19 crisis including:
  • The waiver of commercial rates for certain properties most impacted by the pandemic such as hospitality and leisure venues which has been extended for Q1 2022; and
  • The voluntary Code of Conduct between Landlords and Tenants for Commercial Rents which has been extended to 30 April 2022.
• The Irish Government’s Spring 2022 Legislation Programme lists the following pieces of upcoming legislation relevant to commercial real estate:
  • The Industrial Development (Miscellaneous Provisions) Bill will enable IDA Ireland (Ireland's inward investment promotion agency) to partner with the Ireland Strategic Investment Fund (“ISIF”) to commercially develop office buildings on IDA-owned lands in regional areas;
  • The Land Value Sharing and Urban Development Zones Bill will amend the planning legislation to introduce new provisions to deal with land value sharing and urban development zones as set out in the Government Housing for All plan;
  • There are numerous pieces of planning legislation proposed including a reform of existing judicial review provisions and the streamlining of the substitute consent procedures. A comprehensive review of the existing Planning and Development legislation is under way and the intention is to enact new legislation which will streamline and simplify the planning process. The Government hopes to complete the review by September 2022;
  • Housing and Residential Tenancies legislation will further enhance tenancy protections; and
  • The Regulation of Providers of Building Works Bill will place the Construction Industry Register Ireland (“CIRI”) on a statutory footing and provide in law for the registration of builders, contractors and specialist sub-contractors.
• Administrative changes are on the horizon for Irish commercial real estate:
  • A new body called Táilte Éireann is to be established by the amalgamation of the Property Registration Authority, Ordnance Survey Ireland and the Valuation Office. This will hopefully lead to enhanced efficiencies in the conveyancing process;
  • A further step was taken towards e-conveyancing last month with the introduction of the Electronic Commerce Act 2000 (Application of sections 12 to 23 to Registered Land) Regulations 2022 which applies the specified provisions of the Electronic Commerce Act 2000 to the law governing how an interest in registered land may be created, acquired, disposed of or registered. The Property Registration Authority welcomed the introduction of the Regulations and while they are not yet in a position to accept electronic signatures they say this legislation will enable them to explore the potential for the development of a paperless system of registration.
• ESG will continue to feature heavily in all areas of commercial real estate from portfolio planning to the tenant’s leasing requirements. In case you missed it we discussed the benefits and challenges of ESG in commercial real estate in our panel discussion webinar in October 2021.  The video recording of this session is available on Matheson's Client Learning Hub. If you do not have access to the Matheson Client Learning Hub, simply email Knowledge Insights with your request.

Upcoming opportunities to hear our insights

On 22 March a panel of experts from our commercial real estate finance practice including Cillian O’Boyle and Leonie Dunne will review the Irish commercial real estate finance market and discuss the emerging themes and challenges on property finance transactions.

On 24 March Sally Anne Stone will moderate a panel discussion on why Dublin remains an attractive hub for tech tenants at the Bisnow Dublin state of the market event.

Brian Doran, Cillian O’Boyle and Daniel Peart a partner in our Finance and Capital Markets department will be at MIPIM from 15 to 18 March. If you are attending and would like to meet with us, please contact Brian, Cillian or Daniel.

In the meantime please get in touch with your usual Matheson contact if you’d like to discuss any of these developments further.