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News Release

Dublin

Irish Property Index Q2 2012

Continuing declines in values in Q2 2012 Index


 

Overall Returns for the Jones Lang LaSalle Irish Property Index continued to show positive results for the third consecutive quarter. Other results however, did not perform as strongly, with every other indicator showing negative movement.
 

Although the Overall Returns increased by 0.1% in the quarter, Capital Values (-2.3%), Income (-2.5%) and Rental Values (-1.4%) all produced negative results in the quarter. This is particularly disappointing given the positive results for Q1 2012, for which Income (+1.6%) and ERV (+0.7%) both showed slight increases.

 

Capital Values for all three commercial property sectors (offices, retail and industrial) continued to decline in Q2 2012. The greatest fall in Capital Values was for the Retail Sector (-2.9%), which is a decline on the -1.0% that was recorded last quarter. This reflects the major challenges the sector is still facing. Office and Industrial Capital Values both decreased in the quarter by -2.3% and -0.5% respectively, but at a slower pace than Q1 2012.
Rental Values decreased for Retail (-1.6%) and Office (-1.4%), and Industrial remained consistent, with no change in results since the last quarter.
Hannah Dwyer, Research Analyst at Jones Lang LaSalle stated that ‘the main driver of the decline is rental values and fears around occupation, vacancy costs, voids and rental levels’.
 
Hannah also added that ‘The Index results reflect the negative sentiment in the macro-economic environment in Q2. This sentiment seeps through to occupiers and rental values, and affects investor confidence. The moves towards a resolution of the Euro crisis may improve sentiment, and a pick up in the volume of transactions could help to stabilise pricing if it occurs in the rest of 2012’.