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News Release

Dublin

Commercial Property values fall in 2008

Overall returns suffer as economic crisis continues


Dublin, February 6th 2009 –
In Q4 overall returns fell by -14.5% and by -36.4% in the year to December 2008 according to the latest Irish Property Index by Jones Lang LaSalle.  “The decline in overall returns was primarily due to the fall in capital values which resulted from the international financial crisis and the resulting severe adjustment in yields “commented Dr Clare Eriksson, Head of Research at Jones Lang LaSalle in Dublin.

Capital values in the Index portfolio fell by -39.6% in the year to December 2008 and by -15.9% in the final quarter.  Capital values in the office sector declined by -36.8% in the year and by -14.5% in Q4.  Values in the retail sector fell by -45.1% in the year and by -17.6% in the final quarter.  The industrial sector performed slightly better in the year in terms of capital values with an annual decline of -28.5% and a fall in Q4 of -16.3%.  The large percentage falls are reflective of the extremely low yields that pertained at the end of 2007.

Rental values increased by 1.5% in the year to December 2008 and by 1.7% in Q4, following negative growth of -1.9% in Q3.  The retail sector had a marginal rental growth in Q4 of 0.2%.  The office sector recorded no change in rental values during Q4 2008 ( 0%)  while industrial rental values fell by -0.6% during this period.    In the year to December 2008 rental value movement was positive for both offices and retail with growth of 1.8% and 1.5% respectively.  Rental values in the industrial sector declined slightly during the year by -0.2%.

Income growth for the Index portfolio remained strong, increasing by 3.0% in Q4 and by 5.5% in 2008.  As of December 2008 the Overall income yield for the Index was 6.3%; the income yields for the individual sectors of office, retail and industrial were 6.3%, 5.9% and 7.6% respectively.