The commercial investment market in Ireland is expected to see significantly higher turnover in 2010, compared to those seen in 2009, with Prime yields beginning to stabilise according to Savills.

Turnover in Q1 2010 is estimated to have been €50m however Q2 could see this increase tenfold to as much as €500m.

Joan Henry, head of research at Savills said: “Despite the apparent lack of transactions we expect that turnover by the end of Q2 could exceed €500m made up of approximately 25 individual transactions. This would compare very favourably with the levels achieved in the first six months of 2008 (€441m and 25 transactions) and would be significantly better than the same period in 2009 (€85m and 12 transactions).”

Prime yields meanwhile are looking like they will stabilise but declining rental levels may have an impact on capital values. Prime retail yields in Dublin are predicted to be around 6.0-6.25% compared to a 15 year average of just over 4%, while prime office yields are estimated at between 7-7.25% compared to a 15 year average of just over 6%. Prime industrial yields are estimated at between 8.5-9% compared to a 15 year average of 7.6%.

The supply of property is likely to remain scarce in the short term as the main property funds are continuing to keep hold of the majority of their core assets, resulting in investors finding it difficult to source quality investment properties producing secure income.

Michael Clarke, an associate at Savills, said: “Investor sentiment has improved noticeably but activity has been largely confined to secure product with long leases, primarily bank property sale and leasebacks, which dominated market turnover figures over the last year with approx. 30 transactions taking place at yields ranging from 6.00-7.25%.

“We estimate that the current supply of investment stock on the market which is not currently under offer is in the order of €250m, which is the lowest level of supply since 2005. Furthermore much of this has been on the market for over 18 months and virtually all of this stock is made up of non prime assets for which there is currently little demand. Virtually no new properties have been publicly marketed over the last six months and the majority of deals that are taking place are arising from off market discussions.”