In its bi-monthly report on the Irish market published yesterday, it said prime headline office quoting rents in Dublin city centre are now stablising at around €376/sq m while prime headline rents in the suburbs of the capital are now steady at around €215/ sq m.

However, the vacancy rate in Dublin remained high at 23% and CBRE said that a decline in vacancy would be particularly slow to materialise in this cycle due to the high proportion of older properties and floors of otherwise occupied buildings that are currently being marketed to let.

In the retail market it said that tenants continued to negotiate rental reductions and quoting rents are now down around 30% from peak.

Within the investment market it said that the recovery in property values which has started to emerge in some European property investment markets and most notably in the UK has not yet materialised in the Irish investment market.

However, CBRE said there had been a marked improvement in sentiment and investor interest in the Irish investment market since the beginning of the year.

It said there was a growing trend of international investor interest in a market that has previously been dominated by local purchasers. CBRE said that none of the larger investment transactions that were currently being negotiated in the Irish market were being pursued by domestic investors and few were likely to be funded by domestic banks.

Marie Hunt, director of research at CB Richard Ellis: “Like many markets across Europe, prime office rents appear to be stabilising at current levels. This is the first quarter since the third quarter of 2008 where we have not adjusted our office rental series downwards and hopefully this is indicative of a trend, for prime office properties at least. In the investment sector, prime yields are now stable in all sectors with prime retail, office and industrial yields potentially trending a little stronger over the coming months. All of this is encouraging”.

Guy Hollis, managing director at CBRE, said: “While conditions in the commercial property market for the most part remain challenging, it is encouraging that sentiment is improving now that rents in many sectors are showing signs of stabilising and that prime yields in the investment sector are stable with the potential to trend stronger over the coming months. While it is still early in the year, there has been a notable increase in activity in the last few months, which we believe will translate into higher volumes of transactional activity in the property sector in 2010”.