| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax 2008

Climate Change Reports

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : International Last Updated: May 14, 2009 - 8:12:06 AM


European Commercial Property Market: Switzerland had best performance in 2008 with capital growth at 1.2%; Ireland had worst with negative growth of 37.2%
By Finfacts Team
May 13, 2009 - 3:05:46 AM

Email this article
 Printer friendly page

Every European commercial property market has suffered a unilateral fall in annual capital growth in 2008 compared to the preceding year, as measured by the IPD Pan-European Property Index, in a calendar year which saw only one country, Switzerland, produce a positive capital growth, at 1.2%. Ireland had the worst performance in 2008 with negative capital growth of 37.2% and a net return of 34.2%.

According to the Index, now in its eighth year, capital values in local currencies fell by a record -8.8% last year, with the steepest depreciation in Ireland and UK. Annual income returns rose over the 12-month period by 28 basis points, to end last year at 5.3%, contributing to a total return of -4.0%.

At the sector level, negative capital growth was most pronounced throughout Europe in the Industrial sector, at -15.6%, followed by Retail, at -12.3%, and Offices, at -8.7%.

The impact of currency movements on total returns conversions was significant. Over 2008, sterling depreciated significantly, meaning that returns in sterling were strong with a total return of 16.7%. Conversely, the UK return when measured in euros was considerably weaker and brought down the Pan-European total return in euros to -11.4%. The total return in US dollars was slightly weaker than euros, at -15.7%. This was because of the depreciation of the pound and the slight appreciation of the dollar against the euro after the dollar's low towards the end of 2007.

Last year on a total returns basis, in every European market which the London-based property index company IPD measures, government bonds were the strongest performer with equities the worst and property sitting in the middle. Now only over the very longest periods do equities outperform.

Annualised total returns in local currencies over the three, five and eight years are 4.6%, 6.3% and 6.5%, respectively. In euros, returns are 1.0%, 4.5% and 4.8%, respectively.

Ian Cullen, Co-founding Director at IPD, said: "A euro-denominated investor will have seen 15.8% wiped of the value of a pan-European portfolio in 2008, this reflected falls in capital values in 15 out of the 16 markets in Europe which IPD measures – a greater degree of synchronization that we have seen before. However, money invested outside the eurozone will have seen a double hit – high falls in capital values coupled with weakening non-Euro denominated currencies.”

SCS / IPD Irish Quarterly Property Index results Q1 2009

The SCS / IPD Irish Quarterly Property Index for Q1 2009 shows total returns for the three months to March 2009 were -9.3%, compared with -16.8% the previous quarter. The return for the year to March 2009 stands at -39.1%.

Capital growth was -10.9% in Q1 2009, less severe than the -18.0% recorded in Q4 2008, whilst income return also edged up to 1.7%.

Commercial property underperformed both equities and bonds, where returns were -5.0% and -5.6% respectively.

Rental value growth decreased from 0% in Q4 2008 to -3.2% in Q1 2009.

The leading sector was retail with a total return of -9.0%, whilst the industrial and office sectors returned -9.3% and -9.6% respectively. All Property yields rose to 7.4% in the first quarter of 2009, from 6.7% last quarter

 

UK commercial property capital value decline slows

UK commercial property capital values fell by a further 8.7% in the first quarter of 2009. The decline has slowed noticeably since the record 14.3% fall recorded in Q4 2008, according to the IPD UK Quarterly Property Index. Income return also edged up to 1.7%, from 1.5% last quarter, largely as a product of the continuing falls in asset values.

The All Property total return was -7.1% over the quarter, which still just exceeded that of equities (at -9.1%), but lagged well behind bonds which returned 2.2%.

In contrast the decline in rental values gathered pace, from the -1.5% fall recorded in Q4 2008 to -3.0% in Q1 2009.

The Industrial sector marginally outperformed the other main asset types, with a capital value decline of 7.6%, compared with the -9.0% write down suffered by both the Retail and Office sectors.

All Property equivalent yields rose to 8.9% in the first quarter of 2009, from 8.2% last quarter.

The IPD UK Quarterly Property Index is the UK’s most comprehensive quarterly measure of property investment market movements in values and returns, reflecting the performance of a databank of more than £80bn.

Malcolm Frodsham, IPD Research Director said: “Real estate has endured a rapid fall in capital values in response to a wave of selling from both retail and institutional funds. These funds may be emerging from the pressure of forced sales designed to shore up balance sheets and meet redemptions, but the impacts of an economic recession are now being felt, and rents are falling rapidly across a broad spectrum of assets.”

Related Articles
Related Articles


© Copyright 2009 by Finfacts.com

Top of Page

International
Latest Headlines
Wednesday newspaper review: December 17, 2014
Tuesday newspaper review: December 16, 2014
Monday Newspaper Review - Irish Business News and International Stories - - December 08, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 28, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 27, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 25, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 21, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 20, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 19, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 18, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 17, 2014
Friday Newspaper Review - Irish Business News and International Stories - - November 14, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 13, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - November 12, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 11, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - November 06, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - November 04, 2014
Monday Newspaper Review - Irish Business News and International Stories - - November 03, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 31, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 30, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 29, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 28, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 24, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 22, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 21, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 17, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 16, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 15, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 13, 2014
Friday Newspaper Review - Irish Business News and International Stories - - October 10, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 09, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 08, 2014
Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
Monday Newspaper Review - Irish Business News and International Stories - - October 06, 2014
Thursday Newspaper Review - Irish Business News and International Stories - - October 02, 2014
Wednesday Newspaper Review - Irish Business News and International Stories - - October 01, 2014
Monday Newspaper Review - Irish Business News and International Stories - - September 29, 2014
Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014