| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

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.


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


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Property Last Updated: Oct 25, 2013 - 10:44 AM

Irish commercial property values rise for first time in 6 years after 65% plunge
By Finfacts Team
Oct 24, 2013 - 7:52 AM

Email this article
 Printer friendly page

Irish commercial property values, which fell by more than 65% since the recession, rose by 0.3% during the third quarter of 2013 according to the IPD/SCSI Ireland Quarterly Property Index. The first capital value rise seen in six years was due to improving sentiment around the value of discounted property assets, as well as gradually increasing occupier demand. After 23 quarters of capital decline, the latest figures also show the highest quarterly total return for Irish commercial real estate since September 2007, at 2.6%.

However, the index results mask a far from standard recovery despite positive topline figures. Demand for offices in central Dublin, from both investors and tenants, are driving returns, while recovery across the retail and industrial sectors is slower.

Office total returns were 3.2% during Q3, driven by rising capital values of 0.9%, but returns for industrial and retail lagged at 2.3% and 1.7% respectively. Both sectors continued to see falling capital values of 0.5% and 0.3%, though these represent a substantial easing in their rate of decline.

Discounted property assets have been on the radar of bargain hunting private equity investors for almost two years now, while the launch of Ireland’s first real estate investment trust (REIT) in June 2013 cemented this positive outlook.

High-income yields have been the key driver for investors returning to the market. All property annual income returns of 9.7% to September 2013, are the highest measured globally by IPD, and are over a third higher than that of the 6.0% offered on UK property.

Annual income returns were 10.2% for offices, 12.2% for industrials and 8.5% for retail units. IPD said that provided tenants can be secured, these are tempting targets for investors willing to take on additional risk.

Occupier demand remains crucial for the recovery of the sectors. Rental values declined by 0.4% overall, almost entirely due to lacklustre demand in the retail sector, which saw falls of 1.9% despite a notable, but muted, uptick in consumer spending and sentiment.

Comparatively, rents rose by 0.5% for offices, bolstering the confidence of investors looking to secure income returns, while in central Dublin, office rents increased by 1.0%. Promisingly, occupier demand is also rising from tenants for industrial assets, which saw rental values increase by 0.3%.

Annual returns to September 2013 for all property now amounts to 7.3%, higher than those in the UK (6.5% according to the IPD UK Monthly Property Index), or indeed much of Europe, essentially due to these higher income returns. Comparatively, Irish bonds and equities have returned 14.0% and 24.6% over the same period (JP Morgan 7-10yr/MSCI Ireland).

Ray Hanley, chairman of the Valuation Professional Group of the Society of Chartered Surveyors Ireland (SCSI), said, “Further encouraging reports over the state of Irish economy are giving property investors, both at home and abroad, confidence about the promising recovery in the property market.”

Phil Tily, executive director & head of UK and Ireland, IPD, said, “Growth is creeping back to Ireland’s property market after six very difficult years, but they are six years that have also seen an enormous effort on the part of government and the property industry to reinstate confidence in the market.

“The rewards of lowering stamp duty, the ridding of rent review legislation, maintaining corporation tax levels, and successfully implementing austerity measures are now starting to pay off, and hopefully what is emerging is a fitter, leaner and more sustainable property sector.”

Colm Lauder, associate & consultant for UK and Ireland, IPD, added, “Occupier demand remains a critical component of growth, and has driven the recovery in the office sector and improving returns for industrial units.

“However, neither of these sectors is wholly affected by weak domestic demand, being driven largely by international corporate tenants and exports. Last weeks seventh austerity budget made it clear that there is still a long way to go before domestic spending will significantly increase, which may have some effect on the recovery of the retail sector.”

Check out our subscription service, Finfacts Premium , at a low annual charge of €25

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Latest Headlines
Irish residential rents rise 9% as students face tight market conditions
Irish construction activity growth eased in July
Irish residential property prices fell in Dublin in June
Irish mortgage approvals growth fell sharply in April 2015
Irish land prices among highest in world; Noonan tax cut boosts Dublin prices
AIB cuts Irish variable mortgage rates
Dublin residential property prices rose by 1.1% in March
Global property bubble: Dublin tops 2014 global returns at 44.7%
New Irish housing units in 2015 forecast at only 10,000
Ireland: Dublin house prices up 21% in year to February 2015 after price decline in month
Prime office rents in Dublin to rise by up to 31% in 2015 after 29% surge in 2014
Irish mortgages paid in 2014 at 1976 level; Half of house sales paid in cash
Irish residential property prices fell 1.4% nationwide in January
Irish House Rents: Supply tightens in Dublin's commuter counties in Q 42014
Irish commercial property returns in 2014 among highest in world
Irish Housing: "Unique" demographics to boost demand; Shortages to rise
Irish mortgage approvals in 2014 at 36-year low; Exceed paid loans
Irish commercial property investment in 2014 was 25% above bubble peak in 2006
Irish construction continues to rise from very low base
Irish house asking prices fell back slightly in fourth quarter of 2014
Price/Earnings multiple for Dublin houses is double 1993 level
Residential property rents up almost 10% in Dublin in past year
Irish Government and vested interests lobby for easing of Central Bank's mortgage rules
Ireland tops global property price rankings six years after bust
Number of Irish mortgages paid in 2014 at 1974/75 level - a 40 year-low
Irish construction PMI survey confidence measure highest since 2000
Irish mortgage arrears decline; 38,463 BTL accounts in arrears
Irish Housing: Renting provides less security than ownership, unpredictable rents
Ireland: NAMA to redeem €1bn of senior bonds; Fund Boland’s Mill site development
Ireland: 35,000 social housing units by 2020 achievable; Rental market possibly not
Dublin house prices up 24.1% in year to October 2014
Irish home ownership to fall due to affordability
'Tara Collection' of office buildings on sale in Dublin for €263.8m
Irish Housing Rents 2014: Dublin just 10% short of 2007 bubble peak
Irish Economy: Residential mortgage approvals in 2014 as low as in 1977
Irish Construction: Fastest rise in new business for decade - not level of activity
Biggest US individual landowner responds to tax breaks in Ireland and UK
Irish commercial property annual return to September 2014 at 36.6% - income at global high
NAMA expects surplus of less than €500m - it's not a profit; 88.5% sales to US investors
NAMA selling 588 Dublin apartments - name withheld in announcement