In Short

A round-up of other commercial property news in brief

Returns drop 19.2% in 2009

OVERALL returns from the Irish commercial property market fell by 19.2 per cent last year, a significant improvement on the 2008 results which were down by 36.4 per cent. The latest Irish property index by Jones Lang LaSalle shows that the decline in returns improved in each quarter of 2009 – from -8.9 per cent in Q1 to -1.8 per cent in Q4. “The pace of decline in the market is slowing and is moving steadily back to a period of positive growth,” says Dr Clare Eriksson, head of research with the agency. She says this indicates some stabilisation of the market.

Capital values dropped by 25.6 per cent in 2009. Again, the performance improved during the year culminating with a fall of 4 per cent in Q4. Capital values in Ireland have now fallen by 55 per cent from their peak in September, 2007.

Industrial property had the sharpest decline with a drop of 7.2 per cent in Q4 2009 and a fall of 29.1 per cent in the year to December. Offices were down by 3.2 per cent in Q4 and by 25.5 per cent over 2009. Retail capital values dropped by 24.7 per cent during 2009 and by 4.1 per cent in Q4. The study shows that rental values for the entire index portfolio fell by 21.8 per cent in 2009 compared to a drop of 0.3 per cent in 2008. Income levels had a marginal decline of 0.8 per cent during 2009 but grew by 1.3 per cent in Q4. This suggests that landlords have moved to re-let vacant premises on short term contracts and have renegotiated new rental terms.

Georgian let at 215 per sq m 

In one of the few lettings of an entire Georgian house in the last 12 months, Lambert Smith Hampton has just completed contracts to let 53 Merrion Square to the TMF Group, the global management and accountancy outsourcing firm.

Ian Campbell of the agency handled the sub-letting for Eircom. TMF is believed to be paying a figure slightly over €215 per sq m (€20 per sq ft) for the four-storey over basement building which has a floor area of 642sq m (6,910sq ft). The house is in impeccable condition and is served by a lift.

Office take-up down 56%

Demand for office space in Dublin in 2009 was the lowest for 15 years and take-up fell 56 per cent to 72,959sq m (785,323sq ft), according to the latest report on the Dublin office market by Jones Lang LaSalle. The fact that demand for offices was almost balanced between the city centre and suburbs reflects the narrowing of the rental gap between the two in 2009, says the agency. There was increased competition from city centre offices with enhanced incentives. Headline prime rents fell from €592 per sq m (€55 per sq ft) in 2008 to €430 per sq m (€40 per sq ft) at the end of 2009.