24/10/2013: SCSI/IPD Ireland Property Index Q3 2013

SCSI/IPD Ireland Q3 2013 report is out for commercial property markets and the data is returning some interesting news.

• Irish commercial property (down 65% since the pre-crisis peak) rose 0.3% in Q3 2013 - the first time capital values were up in 23 quarters.
• Per SCSI/IPD, the drivers were: improving sentiment relating to the value of discounted properties (bottom fishing is on) and "gradually increasing occupier demand". 
• Total quarterly return on commercial real estate were at 2.6% - highest since the end of Q3 2007.
• Per release: "Demand for offices in central Dublin, from both investors and tenants, are driving returns, while recovery across the retail and industrial sectors is slower." So things are very much compressed into few sub-zones of Dublin and the 'bottom-fishing' ain't that good in the rest of the nation. 
• Office capital values rose 0.9%, while capital returns to industrial and retail property were still down at -0.5% and -0.3% respectively.
• All property annual income returns were 9.7% in September 2013, the highest measured globally by IPD and much higher than 6% in the UK.
• Annual income returns were 10.2% for offices, 12.2% for industrial properties and 8.5% for retail.
• Alas, rental values fell 0.4% overall on weak retail demand (down 1.9%), offices rents were up 0.5% nationwide and 1.0% in central Dublin. Industrial rents are up 0.3%.

Summary:

Any source

10/10/2013: CBRE Research Q3 2013: Dublin Offices Market & Irish Retail Market

Some good news from the Dublin Office Property markets and Irish Retail Property markets via CBRE Research Notes today. CBRE Research, as usual, provide very good insights and both notes, so quoting from the first note directly:

• 56 individual letting transactions signed during Q3 2013
• Almost 80% of Dublin office take-up in Q3 located in the city centre
• 68% of total lettings in the quarter smaller than 465m2 (5,000 sq. ft.)
• Prime rents expected to increase over coming months as the scarcity of prime office buildings in the city centre escalates
• Continued decline in vacancy rates in all districts
• Prime office yields have contracted by a full 150 basis points in the last 18 months
• Escalation in investment transactional activity over recent months
• Prime Dublin office yields contracted to 6% during Q3
• The city centre accounted for 79% of overall take-up in Dublin in Q3
• The Dublin 2/4 postcode accounted for almost 44% of letting activity in the city centre in the quarter
• The city centre vacancy rate was 15.7% at the end of the third quarter while the vacancy rate in Dublin 2/4 was 12.7%
• 8 office investment sales totalling € 73.65 million completed in Dublin during Q3
• Offices accounted for 30% of overall investment spend in the Irish market during the first nine months 2013

Some charts:

Less encouraging changes in the Retail Property sector. Again, via CBRE:

• An improvement in consumer trends in the first half of 2013 as the Irish economy shows some signs of improvement
• Some variation between the performance of different sectors of the retail market
• Considerable retail leasing and sales activity occurring in the property market
• Prime Zone A rents now showing signs of stabilisation following 60% fall from peak
• Little improvement in high street vacancy rates over the last six months with vacancy rates in provincial towns remaining stubbornly high
• €84 million invested in retail investment properties in the first half of 2013, accounting for 14% of investment activity in the period
• Prime retail yields have contracted since the beginning of the year in response to strong investor demand

And a couple of charts:

Any source