The commercial market throughout Galway city and the west of Ireland has proven to be resilient throughout 2024. In the first quarter of the year, the commercial market stabilised after a slight correction within 2023. Due to a combination of factors including fluctuating interest rates and political uncertainty both locally an internationally, demand for commercial investment properties was somewhat stagnant. With limited supply being offered to the market, demand increased within both Q3 and Q4 respectively.
Shane McDonagh, who leads the commercial department within O’Donnellan & Joyce, commented: “We have witnessed another consistent year within the commercial sector with various sales and lettings throughout the city and across the Connacht region.” The most notable trend was that there were multiple bidders on a majority of assets.
This was evident with the sale of the one of the most prominent properties within the suburbs of Galway city, known as Cunniffe’s of Clonboo. A fully trading filling station with an adjoining public house and large site was offered to the market by public auction. With an attractive reserve price of €900,000, the property attracted numerous bidders who varied from local investors to national operators. After a vigorous and transparent online bidding process, the property sold just shy of €1,000,000. As well as achieving a significant sales price, the property was sold within a five-week period of being launched onto the market.
With limited opportunities becoming available within the city centre, savvy investors were forced to broaden their horizons to suburban areas and larger commuter towns. A sale to note was that of Oughterard Manor, known as Oughterard Nursing Home. The property was offered to the market as an investment opportunity and was subject to a short-term lease agreement for emergency accommodation. Accommodation comprised 32 bedrooms and various living accommodation within the heart of Oughterard. Given its potential for various uses, the property attracted various bidders with several pre-auction offers being received. With a guide price of €1,025,000, the property sold by online auction to a nationwide investor.
Following the above trend, a mixed-use investment property was offered to the market within the Gaeltacht area of Costelloe. Tigh Kitt Public Bar and adjoining pharmacy unit were offered to the market by private treaty with tenants in situ. The property offered a diverse investment opportunity with further development potential. From its initial launch, there was immediate interest from an array of local and overseas investors. The property was offered to the market at €550,000 and a sale was promptly agreed between both a satisfied vendor and purchaser.
Returning to the city centre, demand outweighed supply on all fronts. Various properties requiring upgrading works were in high demand. No 9 Woodquay comprised a self-contained retail unit with overhead apartment and was offered to the market by public auction. In need of extensive refurbishment, the property was offered to the market with an attractive guide price of €170,000. After multiple bids both, online and on the phone, the property eventually sold nearly 40% above the asking price. Another property that required completion works, was No 58 Briarhill Business Park. A c3,000 square foot office building within the established business park was offered on a shell and core basis with a guide price of €295,000. Due to its close proximty to Parkmore and various industrial hubs, a shrewd investor acquired the same to develop grade-A style office / R&D accommodation.
With the supply of housing being at the forefront of the media and recent electoral debates, the demand for serviced development land is at a premium. O’Donnellan & Joyce conducted the sales of various sites within the city and county over the past 12 months. Although offered to the market in late 2023, the sale of 1.5 acres of residentially zoned land on the Cappagh Road, Knocknacarra concluded in Q1 2024. Moving further west, a sale of significance was that of a bespoke site on the Pier Road, Barna. The site extended to 0.59 acre and comprised various outbuildings, however it benefited from picturesque views overlooking Barna Pier. Due to unprecedented demand, “best and final” offers were called, and a sale was concluded after an aggressive six-week marketing campaign. O’Donnellan & Joyce were actively involved in various off market advisory transactions throughout the county.
An example of the above outlines the diverse range of sales and lettings that were successfully handled by O’Donnellan & Joyce within a 12-month period. As noted, Q3 and Q4 were most notably much busier than the first of half of 2024. This is evident by an influx of instructions, most of which are under offer and due for completion or actively on the market. An example of which are Nos 6 & 7 High Street, Galway city which was recently launched to the market as an investment opportunity. This extensive high street retail opportunity within the heart of Galway city is attracting nationwide interest from pension funds along with national retailers. Other recent instructions include Nos 1-3 Merchants Road, which is an iconic 12,000 square foot hospitality premises positioned 200m from Eyre Square with a guide price of €2,200,000. Martin House within Dangan Business Park is a multi-storey office block in excess of 35,000 square foot which is being offered for sale / to let within close proximity to UHG and University of Galway. The above are a mere example of instructions received within Q4 of 2024. Moving further from the city centre, Shane McDonagh has agreed a sale of an extensive warehouse facility within Newpark Industrial Park, Swinford, Co Mayo. The property extended in excess of 60,000 square foot and was offered to the market at €1,900,000. A sale has been agreed and hopeful for completion in Q1 2025.
O'Donnellan & Joyce's advisory services have also expanded throughout 2024 as a whole. This has been bolstered by the appointment of Niall Cuddy MRICS MSCSI, senior valuer and consultant, to the commercial department of O’Donnellan & Joyce. Niamh Smyth, junior surveyor, provides a pivotal role within the department in assisting with appraisals and inspections.
With the benefit of being based on the ground within Galway city along with having in-depth knowledge of the entire west of Ireland, O’Donnellan & Joyce have acted as valuers and negotiators for national firms and State bodies from Limerick to Sligo.
Having being engaged to carry out several rent reviews and lease negotiations from the beginning of the year, there appears to be strong appetite from retailers and SMEs to remain active and present within the city centre and surrounding suburbs.
2024 has exceeded all expectations within the commercial sector and has proven that even in a time of uncertainty, demand for well-located commercial properties will outweigh supply. The main takeaway from 2024 and moving into 2025 is that commercial property values are fluctuating depending on sectors. Independent and in-depth valuations are paramount for both owner occupiers and tenants. For further advice, contact Shane McDonagh or Niall Cuddy of O’Donnellan & Joyce auctioneers.
