independent

Thursday 17 April 2014

Office-space demand pushes commercial property prices up for first time in six years

Frank Daly: says demand is accelerating

Commercial property prices have risen for the first time in six years.

Prices were up 0.3pc in the three months to the end of September, according to Investment Property Databank Ltd's quarterly property index.

The creep up in prices was led by an increase in demand for office space in Dublin, according to the new research.

Commercial property includes shops, warehouses and factories, hotels, offices and other business premises.

Meanwhile, NAMA says it is "working hard" to make its portfolio available to the market and fill any shortage in the commercial property industry, but it could be sometime before its properties become available.

Speaking in Belfast, NAMA chairman Frank Daly said that the State's bad bank was regularly putting properties up for sale, but it could only do so where there are interested buyers.

"In sectors where demand is rising, as is now the case with the Dublin office and residential sectors, we are moving quickly to address supply shortages that can by met from our portfolio – evidenced by some important transactions in recent weeks and a noticeable acceleration of such in recent months.

DEMAND

"As the economy picks up, North and South, our debtors will respond by releasing supply in response to emerging demand. In some cases that supply will be market ready – in others it will need investment in completion, in yet other cases it will mean brown-field or green-field development. NAMA is interested in all three," he said.

Elsewhere NAMA's head of asset management John Mulcahy said that while the agency may get back the €32bn it spent taking in bad loans, it was "unrealistic" to think that the bad bank could ever sell those loans on or have them repaid to their "par" value.

Addressing the Chartered Surveyors of Ireland's conference in Dublin, Mr Mulcahy defended the agency's performance since it was set up.

"Our debt that we bought for around €32bn was originally worth €70bn so NAMA's objective was to get back at least the €32bn. "With a following wind, we might get a little more than €32bn, to get back to par, I think is unrealistic."

Also speaking at the event was IDA boss Barry O'Leary, who emphasised the need for new office buildings to accommodate foreign investment.

He added that the agency was seeking to dispense with numerous office and factory buildings in IDA business parks that were no longer suitable.

Irish Independent

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