03. Mai 2010 
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Signs of improvement in the Irish commercial property sector
The Dublin office of CB Richard Ellis Group today launched their latest bi-monthly assessment of conditions in the Irish commercial property market. The May 2010 update outlines that while conditions generally remain challenging, there are definite signs of an improvement in sentiment and activity in some sectors of the market in recent months.
Report Highlights
► Improvement in overall activity on quarterly and annual basis
► Prime rents and yields have stabilised and total returns in Q1 2010 were positive for the first time in over two years
► Rents on secondary industrial accommodation continue to fall dramatically
► Increasing appetite for good hotel properties in prime locations subject to realistic valuations and the availability of funding
Marie Hunt, Director of Research at CB Richard Ellis said, “While transactional activity in the commercial property market is still performing below capacity, activity in all sectors of the market is up on a quarterly and on an annual basis, which is encouraging. Considering the underlying level of activity in each sector, particularly the investment market, we expect to see further improvement as the year progresses. Prime rents and yields have now firmly stabilised and total returns from Irish commercial property in Q1 2010 were positive for the first time in over two years”.
Guy Hollis, Managing Director at CB Richard Ellis said, “We are very encouraged to see signs of increased activity in the economy beginning to have a direct impact on take-up activity in the commercial property market. We are also seeing the signs of much more activity in the domestic investment market. With the latest IPD figures moving into positive territory, retail sales improving marginally and NAMA now starting to gain some momentum, markets are beginning to stabilise and we can now look forward to the long road to recovery which will inevitably follow”.
According to the report, there has been a notable improvement in enquiry levels and viewings in the Dublin office market in recent months, with a large proportion of demand emanating from the IT and pharmaceutical sectors. Take-up of office accommodation in the first quarter of the year reached almost 25,000 sqm and the property consultants are confident that last years annual take-up level of approximately 78,500 sqm will be beaten in 2010. However, CB Richard Ellis say that many of the companies that are looking for new office accommodation in the capital are subsequently seeking to relet their existing premises, meaning that the stock of vacant office properties remains stubbornly high. According to the report, prime headline rents in Dublin city centre have stabilised although they say that rents in outlying locations without adequate transport links continue to come under downward pressure.
The new report says that retailers are reporting some improvement in activity in recent weeks as was confirmed by the most recent release from the Central Statistics Office. The property consultants continue to witness retailers looking for relocation and expansion opportunities around the country. They point out that while retailers entering new leases can avail of competitive terms and conditions in the current climate, retailers who signed leases at the peak of the market continue to struggle with high rental costs.
Take-up in the industrial sector of the property market is holding up well according to CB Richard Ellis who report that at almost 58,000 sqm, the quantum of industrial letting activity recorded in the first three months of 2010 in Dublin was approximately three times higher than that achieved in Dublin during the same period last year. However, the property consultants say that Q1 take-up was skewed by two large transactions and the reality is that most of the activity in the industrial market at present is made up of small short-term lettings.
Report Highlights
► Improvement in overall activity on quarterly and annual basis
► Prime rents and yields have stabilised and total returns in Q1 2010 were positive for the first time in over two years
► Rents on secondary industrial accommodation continue to fall dramatically
► Increasing appetite for good hotel properties in prime locations subject to realistic valuations and the availability of funding
Marie Hunt, Director of Research at CB Richard Ellis said, “While transactional activity in the commercial property market is still performing below capacity, activity in all sectors of the market is up on a quarterly and on an annual basis, which is encouraging. Considering the underlying level of activity in each sector, particularly the investment market, we expect to see further improvement as the year progresses. Prime rents and yields have now firmly stabilised and total returns from Irish commercial property in Q1 2010 were positive for the first time in over two years”.
Guy Hollis, Managing Director at CB Richard Ellis said, “We are very encouraged to see signs of increased activity in the economy beginning to have a direct impact on take-up activity in the commercial property market. We are also seeing the signs of much more activity in the domestic investment market. With the latest IPD figures moving into positive territory, retail sales improving marginally and NAMA now starting to gain some momentum, markets are beginning to stabilise and we can now look forward to the long road to recovery which will inevitably follow”.
According to the report, there has been a notable improvement in enquiry levels and viewings in the Dublin office market in recent months, with a large proportion of demand emanating from the IT and pharmaceutical sectors. Take-up of office accommodation in the first quarter of the year reached almost 25,000 sqm and the property consultants are confident that last years annual take-up level of approximately 78,500 sqm will be beaten in 2010. However, CB Richard Ellis say that many of the companies that are looking for new office accommodation in the capital are subsequently seeking to relet their existing premises, meaning that the stock of vacant office properties remains stubbornly high. According to the report, prime headline rents in Dublin city centre have stabilised although they say that rents in outlying locations without adequate transport links continue to come under downward pressure.
The new report says that retailers are reporting some improvement in activity in recent weeks as was confirmed by the most recent release from the Central Statistics Office. The property consultants continue to witness retailers looking for relocation and expansion opportunities around the country. They point out that while retailers entering new leases can avail of competitive terms and conditions in the current climate, retailers who signed leases at the peak of the market continue to struggle with high rental costs.
Take-up in the industrial sector of the property market is holding up well according to CB Richard Ellis who report that at almost 58,000 sqm, the quantum of industrial letting activity recorded in the first three months of 2010 in Dublin was approximately three times higher than that achieved in Dublin during the same period last year. However, the property consultants say that Q1 take-up was skewed by two large transactions and the reality is that most of the activity in the industrial market at present is made up of small short-term lettings.
