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News Release

Dublin

Overall returns for Irish commercial property fell by -19.2% in 2009.  While still negative, the performance for the year is much improved.


Overall returns for Irish commercial property fell by -19.2% in 2009.  While still negative, the performance for the year is much improved on the -36.4% overall return movement recorded in 2008, according to the latest Irish Property Index by Jones Lang LaSalle.  The performance of overall returns steadily improved during each quarter of 2009, reducing from -8.9% in Q1 09 through to the lower negative movement of -1.8% in Q4 09.  The pace of decline in the market is slowing and is moving steadily back to a period of positive growth.  This indicates some stabilisation of the market which is a positive sign for commercial property in Ireland commented Dr.Clare Eriksson Head of Research with Jones Lang LaSalle.

Capital values in Ireland dropped by -25.6% in 2009.  Again, the performance of capital values in the market steadily improved during the year culminating with a change of -4% in Q4 09. Capital values in Ireland have now fallen by -55% from their peak in Q3 2007.  Industrial property experienced the sharpest decline in capital performance during the year of -7.2% in Q4 09 and -29.1% in the year to December.  Capital values for offices fell by -3.2% in Q4 09 and by -25.5% during 2009.  Retail capital values dropped by -24.7% in the year to December 09 and by -4.1% in Q4 09.

Rental values for the entire Index portfolio fell by -21.8% in 2009.  This compares to a movement of -0.3% in rents for 2008 and confirms that declining rents were one of the main features of the Irish commercial property market during 2009.  Industrial rental levels were the hardest hit falling by -24.8% in the year to December 2009 and by -13.5% in Q4 09.  Office rents dropped by -6.6% in Q4 09 and by -23.8% during 2009.  Retail rental values were -5.5% in Q4 2009 and -17.8% in the year to December 2009.

Income levels in the Index had a marginal yearly decease of -0.8% in the year to December 2009 but grew by 1.3% in Q4 2009.    This is reflective of the active asset management undertaken by landlords in a bid to negate the effects of voids and rent free periods and maintain cash flows by agreeing to short term lets and renegotiating rental agreements