Marie Hunt

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• Marie Hunt
• Director of Research

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What We Said Last Year

• Further Yield Contraction Highly Unlikely
• Rental Return In The UK No Longer
  Self-Financing
• Lenders More Vigilant In Their Loan Assessments
• Irish Investors Less Dominant In The UK
• Office Sector Best-Performing Sector Of The
  Irish Market

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What We Said Last Year

• Energy Performance Of Buildings Increasingly
  Topical
• Conditions In The Retail Sector More
  Competitive
• Securing Anchor Retail Deals Very Challenging
• Duty Of The Development Community To Adopt A
  Realistic Approach Put The Brakes On
  Development Of New Homes

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Property Market Performance
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Sectors Sub-Sectors
The New Homes Development Land Market
The Occupier Markets
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Irish Investment

• Caution Will Prevail In The First Half Of 2008
• Yields Will Come Under Pressure
• Many Transactions Will Be Conducted Off-Market
• Huge Focus On Redevelopment Of Prime Assets
• Total Returns Will Moderate
• Stock Selection More Important Than Ever
• Confidence The Vital Ingredient!

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Overseas Investment

• Investment Appetite Strong But Investors More
  Cautious
• Availability Cost Of Finance Will Dictate Pace
  In 2008
• Good Buying Opportunities Emerging
• Value Resurfacing In The UK
• More Focus On Established Markets
• Increasing Appetite For Emerging Locations
• Active Spending Expected Although Caution Will
  Prevail

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Offices

• Strong Levels Of Activity Expected Although Down
  On 2007
• Less Reliance On The Financial Sector
• More Forward-Funding Transactions Emerging
• Energy Efficiency Sustainability Coming To The
  Fore
• No Significant Increase In Rental Levels In 2008
• Improving Demand For Suburban Offices
• Landlords More Flexible On Lease Terms
• Oversupply Needs To Be Monitored Very Carefully

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Retail

• Consumer Spending Expected To Ease In 2008
• No Impact On Expansion Plans Of Irish Or Overseas
  Retailers
• Very Few New Shopping Centres Due To Open This
  Year
• More Focus On Redeveloping Older Facilities
• Landlords More Flexible On Leasing Terms
• Possibility Of More Turnover-Based Transactions
• Good Anchor, Good Design Appropriate Tenant Mix
  Crucial
• Fundamentals To Remain Favourable But Some
  Casualties As Competition Intensifies

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Industrial

• Healthy Levels Of Take-up Expected In 2008
• Occupiers Continuing To Re-Locate To New
  Hotspots Along New Upgraded Road Networks
• Supply Unevenly Distributed
• Retail Sector A Bigger Driver Of Demand
• Demand For Larger Units Increasing
• No Significant Uplift In Rental Values Expected
• Land Values To Remain Stable

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Hotels

• Pick-Up in Transactional Activity in 2008
• Pent-Up Demand For Quality Established Hotels
• Pace Of Activity Dependent On Availability Of
  Funding
• Purchasers Primarily Existing Operators
• More Focus On Core Fundamentals
• Existing Hotel Assets More Efficient Route Into
  Business
• Profitability Competitiveness Being Eroded
• Hotel Business Fundamentally In A Very Strong
  Position

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Pubs

• Reduction In Number Of Developers Buying Pubs In
  2008
• Strong Prices For Well-Located Properties With
  Established Turnover Figures Future Trading
  Potential
• Existing Pub Operators Will Dominate Purchasing
  Activity
• Trading Conditions Will Put Some Under Financial
  Pressure
• Adapting To Changing Market Conditions Vital
• A High Margin Business That Can Be Very
  Profitable
• Availability Of Bank Funding Realistic Price
  Expectations Will Dictate The Pace Of Sales
  Activity

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New Homes

• Buyer Apathy Yet To Dissipate
• Stamp Duty Changes In Budget 2008 Welcome
• Further Decline In Annual Completions Expected
  This Year
• Considerable Backlog Of Unsold Inventory To Be
  Absorbed
• Developers Unlikely To Commence New Schemes Until
  2009
• Prices Stable In 2008 - Some Uplift Possible In
  2009
• Fundamentals Remain Positive
• Pace Of Activity Wholly Dependent On Confidence

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Development Land

• Increased Transactional Activity Following 2007
  Price Falls
• Increase In Off-Market Transactions
• Demand From Opportunistic Developers For
  Well-Located Sites
• Demand For Provincial Land Will Remain Relatively
  Weak
• Lenders Need To Obtain Independent Advice
• Knowledge Of Existing And Proposed Transport
  Links Vital
• Some Irish Developers Focussing Overseas
• An Active Year For Experienced Players Taking A
  Long-Term View

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Summary

• The Irish Property Market Will Weather The Storm
  Well In 2008
• The Irish Economy Is Better Positioned Than Most
• Activity In Each Sector Will Vary Considerably
• Shrewd Investors Will Seek Out Buying
  Opportunities
• Occupier Markets Healthy Albeit Rental Growth
  More Subdued

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Summary

• Pent-up Demand For Good Hotel Pub Opportunities
• Significant Increase In Transactional Activity In
  Development Land Sector If The Market Accepts
  Price Adjustments
• New Homes Sector Will Rebound But Slowly
• A Challenging Year But Good Opportunities For
  Those Taking A Long-Term View
• Availability Cost Of Funding And Confidence
  Vital

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Property Market Performance
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