The commercial property market has come to a "virtual standstill", despite a dramatic drop in the value of deals, according to a report by estate agent CB Richard Ellis.

During the first half of 2008, investors agreed deals worth €392 million, a mere fraction of the value of transactions completed during the same period last year.

The 2007 six-month total amounted to €1.9 billion.

In its third quarterly market trend report, CBRE said prices would have to fall further to reinvigorate the market, which has come to a "virtual standstill" in recent months.

Director of Research at CB Richard Ellis, Marie Hunt, said: "The market has been characterised by a lack of transactional activity in recent months.

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"Irish investors have signed only €392 million of investment transactions in Ireland in the first half of 2008, compared to €1.9 billion in the whole of 2007,

"A similar trend has been experienced in Britain, where Irish investors have invested only €795m in the first six months of 2008 - a dramatic reduction considering Irish investors accounted for €5.5bn of investment transactions in Britain last year."

The firm has blamed the market slump on weaker economic conditions, problems securing finance for deals and the fact that many sellers are reluctant to accept the recent decline in prices.

Guy Hollis, CB Richard Ellis's Irish Managing Director, said: "We believe that yields may have to increase by another 50 to 75 basis points to attract buyers.

"This could bring prime retail yields in the Irish market to 4.25%-4.50%; prime office yields to 5.25%-5.50% and prime industrial yields to 6.25%-6.50%.

"The reality is that there is a weight of money building up for investment in property in Ireland, but not at current pricing."

(PR/JM)