The European property industry gathered in Munich last week at the 12th Expo Real Trade Fair. This commercial property exposition saw 21,000 visitors from 73 countries descend on the German city for three days of meetings and discussions with all participants eager to sense the mood of investors.

A small contingent of Ireland's property advisers were there, together with investors and owners of property abroad.

Times have changed somewhat. In previous years the Irish were very conspicuous in their attendance. In fact Anglo Irish Bank was one of the sponsors of the European Property Awards held at the event. However, this year the delegation was reflective of our economy – smaller and more reserved.

The rationale for being there has also changed somewhat. In the recent past Irish participants were seeking out investment opportunities, finding owners willing to sell and new territories to conquer. This time round the Irish were seeking out investors who might have an interest in coming to Ireland to acquire property.

So what do foreign investors think of our property market? Do they see it as an opportunity or are they running scared?

In short the answer is that Irish property is very much on the radar for European investors. European property investment is more and more being seen as one market with investors comparing yields between various cities and making decisions based on the risk and potential return of each.

Over the past 10 to 15 years Irish yields were far too low compared to other European countries and as a result no foreign funds invested here. However, over the past 18 months, Irish investment yields have drifted considerably and as a result they are now attracting the attention of these funds.

Several German funds have already been to Ireland to assess things for themselves and have not been scared away by what they have seen. The German fund, Deka, has acquired the Tommy Hilfiger shop at Grafton Street in Dublin and this has given other German funds the confidence to follow suit.

Apart from yields, why are these funds looking at Ireland? The funds I met with all mentioned two main reasons. First, we are part of the euro and thus they do not have to hedge currency risk as they would have to do in other countries such as Britain. Second, our long lease terms and rent review structures are attractive to these risk-averse funds. In essence they get an investment similar to that in the UK but without the currency risk.

They were very aware of the proposal by the government to make upward-only rent reviews illegal, and when this was first announced, the attraction of the Irish market took a severe hit. The fact that this now appears to be off the agenda has focused their attention again.

For the sake of liquidity in our market, it is very important that foreign funds invest here so it is certainly good news that a good number of funds are actively seeking out opportunities.

What are they looking to acquire? Their focus is very specific. They will buy only prime assets with secure income. They do not like risk, so the length of lease (10-plus years) and the financial strength of the tenant are both extremely important. They will acquire offices, retail and industrial property but location and building age are also critical. They look for modern specifications, with the building being preferably no more than five years old. Obviously prime retail properties such as those at Grafton Street are much older than this; however, these would be the exception.

All in all, while attendance was down, the mood at Expo 2009 was a good deal better than it was a year ago. The general feeling was that the market is turning, with opportunities now showing value. Investors are back on the acquisition trail. In Ireland we will see new players coming into the market who will inject fresh liquidity. This can only be good news.

Sean O'Neill is investment director of DTZ Sherry FitzGerald