DUBLIN-Lending in Ireland, almost destroyed by significant bank exposure to bad property loans, will almost certainly be extremely conservative for some time in the future, according to HT Meagher O’Reilly director Adrian Trueick. His firm, as well as Saskatoon, Canada-based ICR Commercial Real Estate, recently joined Falls Church, VA-based CORFAC International.

HT Meagher was founded in 2004 by Trueick, James Meagher and Declan O’Reilly, and has been involved in many of the largest commercial and industrial property transactions in Ireland. ICR, led by Phill Elenko, has three offices in Saskatchewan providing brokerage and property management.

Trueick tells GlobeSt.com that Ireland’s financial crisis has been very damaging for Ireland’s economy, and a recovery will take a number of years. “The steps taken to reduce government spending and increase taxes, while necessary, have had a negative effect on consumer confidence and resulted in increased unemployment in the construction, service and retail sectors,” he says. “There is a significant over-supply of property in some areas. During the boom, large scale development of both residential and commercial space took place in fringe locations where the local population could not support the level of new development. Some of these developments, including large housing estates and retail parks, will never be viable and some may in time have to be demolished or converted to alternative use.”

However, he says that although the domestic economy is still very fragile, the export sector is recovering and is now the main driver of growth.  Ireland continues to benefit from significant levels of foreign direct investment by multi-national companies. As Ireland is the only English speaking country in the Eurozone, multi-nationals including Google, Facebook, Microsoft, BNY Mellon and Citibank are all growing their Irish operations.

“Collectively US companies have $190 billion in foreign direct investment in Ireland,” Trueick says. “This represents 9% of all US investment in the EU and equates to more than the total invested by US companies in the BRIC economies (Brazil, Russia, India, China).”

 The effect of the above on the property market has been that while demand for retail and residential properties has remained subdued there is an increasing requirement for commercial space, particularly offices in Dublin. In the major population centers, there has been very limited new development over the last five years and a significant amount of the new space developed during the boom has now been absorbed.

Trueick says the lending crisis has forced local banks to concentrate on deleveraging, reducing exposure to the property sector by selling loan portfolios. However, he says the economy is starting to show signs of growth. “New lending is likely to continue to be very conservative, with lower loan to value ratios and higher lending margins,” he says. “As most of the banks are now either fully nationalized or part state-owned, the government is likely to have a strong influence on their lending policies in the future.”