SINCE 1992, the commercial property market has moved from the stages of depression to recovery, to its current boom. Property values have behaved in the expected way, with values rising by 30 to 40 per cent over the period. Currently, there is minimal availability of medium-quality property at a reasonable price. Few people are selling as they believe in the future performance of their property. Last week's ESRI forecast is likely to prompt people to hold on for at least another few years as they believe the honeymoon for property is not over.

Of course there is the risk of overheating, as happened in the UK in the late 1980s when, as a result of a booming economy, property values escalated to an unsustainable level - and collapsed with a very hard landing when the economy went into recession.

The non-availability of property opportunities in Ireland has influenced some investors to look at the UK market, where good properties are still available at realistic prices. I have been involved in the acquisition of almost £80 million worth of UK property over the past 12 months on behalf of Irish private investors. I believe that there are still good opportunities for Irish investors in the UK for the following reasons:

The cyclical situation

THE UK economy is further back along the economic recovery cycle than Ireland. From a property perspective, I would put it roughly as being in the same situation as Ireland was about 18 months ago. We tend to forget that in Dublin just two years ago, vacancy rates in the office and industrial sector were in excess of 10 per cent, although they have now dropped to less than half this level.

However, they are still at the 10 per cent-plus level in the UK. This is because the business users of office, industrial and retail space are still cautious about taking on new commitments and an over-supply from the boom of the late 1980s.

In cities such as Manchester or Birmingham, you can see a lot of letting agents' boards on buildings. This is both a positive and negative; there are opportunities but also risks.

The crash of 1989/90

TO understand the UK market, one has to look at the effect of the property boom at the end of the 1980s. When the economic and property bubble burst in 1989/90, there was a huge fall in property values. Some properties fell in value by more than 50 per cent. Many investors and bankers were badly burnt. Over the past year or so, property values have started recovering but the "catch up" phase has still some way to go before values get to the equilibrium level that they are in Ireland.

Higher yields

INVESTMENTS yields are between 1.5 and 2 per cent above the level that would be available in Ireland for good quality investments. In other words, a property that can be acquired in the UK at a yield of say 8 or 8.5 per cent would sell in Ireland for 7 per cent.

This higher spectrum of yields in the UK, is related to its earlier position in the property cycle and general caution by occupiers to the oversupply of space.

However, it is important to note that a high yield on a particular property may also be attributable to the fact that many buildings are let at rents above the prevailing open market rental value.

Thus, some element of the higher yields available in the UK reflect the "over-rent" being paid by an occupying tenant. Of course if the lease is short or the tenant is weak, the higher rent could easily stop. Therefore, a high yield may merely reflect a higher risk that the rent may tall when the lease expires.

Properties are available

UNLIKE Ireland, good to medium-quality properties of £1 million-plus are available for those who know where to find them. However, each city has its good locations and its bad locations. For the uninitiated Irish investor it is very important not to end up with a poor property in the wrong location. I would strongly advocate retaining a trustworthy, competent local adviser - preferably a chartered surveyor with experience and a good track record for the particular city.

Transaction costs are low

WITH stamp duty at 1 per cent for UK property transactions and other professional fees equal to or lower than Ireland, the cost of entering and exiting the UK property market is 5 to 6 per cent lower than in Ireland. Thus, if you do make a good profit on a deal, a large slice of it does not go on stamp duty. Also capital gains tax is not payable in the UK by over seas investors; of course, it may be payable in Ireland.

With regard to funding, in spite of the difficulties experienced by the banks and building societies in the late 1980s, funding is available on attractive terms for good property on similar terms to those that you would find in Ireland.