Dublin has dropped from 13th to 17th position out of 30 European cities ranked for investment and development potential for 2025.
London, Madrid and Paris took the top spots, according to a report by PwC and the Urban Land Institute.
When it comes to investing in Ireland, interviewees referenced certain infrastructure deficits and the complexity of the planning environment as factors that need to be addressed.
“Provided that Ireland continues to address the infrastructural and planning issues, and ensures stability of tax policy regime, stakeholders expect that Dublin will remain a significant player in the European real estate landscape,” said Joanne Kelly, Leader, PwC Ireland Real Estate Practice.
“Dublin is in a unique position as the only English-speaking capital in the EU, with its robust economic fundamentals and a young dynamic workforce which continues to attract international businesses and investors,” she added.
Today’s report reveals that the outlook for the European real estate market is cautiously optimistic, despite growing geopolitical uncertainty and concerns about economic growth.
More than 80% of survey respondents expect business confidence and profits to stay the same or rise in 2025, with around half predicting increases in both.
But concerns remain, with 85% citing political instability and 83% the conflicts in Europe and the Middle East as sources of considerable volatility.
“It is clear from this year’s report that there are signs of improvement on the horizon for the commercial real estate sector following two very challenging years,” said Marie Hunt, Chairperson of ULI Ireland.
“As interest rates decrease and inflationary pressures ease, there are signs of increased transactional activity and a stabilisation in values on the horizon,” she added.
Among the sectors to watch, data centres ranked first in the overall investment and development prospects for European real estate, followed by new energy infrastructure, student housing and logistics.
The outlook for office and retail investment remains subdued following continuing caution about the impact of structural change.
This year’s survey highlights that environmental, social, and governance (ESG) remains one of the most significant challenges for real estate both in the short and long-term.
More than 70% of respondents are concerned about environmental issues in 2025, and 72% flagged this as an issue for the next five years.
