The Irish property market saw only two investment transactions in the first quarter of 2011, property consultant CB Richard Ellis said on Thursday.

The lack of activity is directly attributable to plans by the new government to retrospectively review rent provisions in existing business leases, CBRE said. The property consultant warned earlier this year that a lack of clarity about these proposals would hamper investment activity in the Irish market.

In 2010, 29 transactions with a combined value of almost EUR 242 million were completed in the Irish market, with approximately 30% of this value being attributed to non-Irish buyers.

CBRE says the implementation of a retrospective review of rent provisions in existing lease contracts will prove a huge constitutional challenge says from a legal perspective. And it warns investment activity will remain constrained until such time as the new administration confirms their intentions in this area.