Dublin, 16 April 2012 - Hannah Dwyer, Research Analyst at Jones Lang LaSalle said that ‘Although the year-on-year Overall Return figure continues to be negative (-1.2%), it is positive to see that following the stamp duty change last quarter, which significantly positively impacted Overall Index results (+3.6%), the figure has continued to increase further’.
There are however signs from results that show the market is still some way from recovering. Whilst the Overall Return was positive due to Income, which increased overall by +1.6%, Capital Values for all three commercial property sectors (offices, retail and industrial) continued to decline in Q1 2012. The Capital Value of commercial property overall fell by -1.7% in the quarter and -10.2% in the year to March 2012.
The office sector experienced the sharpest decline in capital performance since Q4 2011 (-2.4%) and Q1 2011 (-11.3%). Capital Values for industrial dropped by -1.9% and -11.2% in the quarter and year respectively. Retail performed only slightly better with falls of -1.0% in the quarter and -9.4% in the year.
Positively, Rental Values across the entire Index portfolio increased by +0.7%, the first time ERV has increased since Q2 2008. However, the ERV’s did vary significantly across the three commercial sectors. Office and industrial ERV increased by +1.8% and +0.5% respectively, whilst retail Rental Values fell by -0.7% in the quarter. This highlights the continuing pressure placed on the retail sector in the current market.
Hannah added that ‘overall, the Index results are best described as stable which, given past fluctuations is encouraging for the commercial property market in Ireland’.