National Commercial Vacancy Rate Reaches Record High

As we navigate the ever-changing landscape of the Irish property market, the latest insights from GeoDirectory’s Commercial Building Report present a compelling narrative of the current trends. This report underscores the challenges that the commercial property sector faces and sheds light on the influences reshaping the sector.

Our analysis reveals that in the final quarter of 2023, Ireland’s commercial vacancy rate surged to unprecedented levels, signalling a challenging landscape for businesses. With 30,046 empty commercial units across the country, the national commercial vacancy rate climbed by 0.3 percentage points to 14.3%—the highest it has been since the inception of this report in 2013.

A Closer Look at the Numbers

Total Commercial Stock

The total commercial stock in Q4 2023 stood at 210,820 properties, marking an increase of 110 units compared to the previous year. However, this growth in stock has not translated into a decrease in vacancy rates.

County-Level Trends
  • Galway and Sligo experienced the most significant spikes in vacancy rates, each rising by 0.9 percentage points. These counties are grappling with an influx of unoccupied commercial spaces.
  • In contrast, Wicklow maintained a steady commercial vacancy rate, remaining unchanged during this period.
  • Across the nation, 20 out of the 26 counties witnessed an uptick in vacant commercial properties. This trend persists for the fifth consecutive year, highlighting the widespread impact of the economic climate.
Dominant Sectors

The services sector continues to dominate the commercial landscape, occupying 49.3% of all commercial properties. Meanwhile:
  • The retail and wholesale sector claims the second-largest share, accounting for 22.1% of the total.
  • The health sector represents the third-largest share of occupied commercial sites, making up 9.5% of the overall stock.
Sector-Specific Changes
  • Despite its prominence, the services sector also faced the most substantial reduction in commercial units. A total of 636 units were removed, constituting 43.1% of the overall decrease.
  • Retail and wholesale experienced the second-highest reduction, shedding 548 units.
  • The financial and insurance sector followed suit, with a decline of 137 units.
  • The industrial sector mirrored this downward trend.

What this means for the Irish commercial property market

The surge in commercial vacancies poses challenges for landlords, investors, and local economies. As businesses adapt to changing consumer behaviour and economic uncertainties, addressing this issue becomes crucial. Stakeholders must explore innovative solutions to revitalize these empty spaces and foster economic growth.

Find out the complete findings from GeoDirectory’s commercial buildings reports at geodirectory.ie/knowledge-centre
 
Posted: 28/02/2024 15:03:36