Commercial property prices continue steep decline
COMMERCIAL property prices fell again in the second quarter, with the rate of decline speeding up, as rents continue to plunge, according to a new report. Rents in city centre Dublin have fallen the least while prices in the south-east have fallen the most.
Property prices fell 3.5pc in the second quarter as rents tumbled 7.5pc, global property information company IPD said in a report. Commercial rents have fallen 30.6pc in the past 18 months and 10.6pc in the past six months, the report adds.
"While there are tentative signs of an economic recovery manifesting, the retail sector has been hurt by squeezed disposable income. Any recovery in consumer spending will likely take some time to gain traction," said Phil Tily, who heads IPD's Irish operations.
Commercial property rents have fallen the least in Grafton Street and parts of Dublin city centre, according to the report. They have fallen the most in the south-east where industrial property rents slumped around 15pc in the previous quarter and in the retail area around Dublin's Henry Street and Mary Street, the report said.
Property values fell 7.1pc in the second quarter in Henry and Mary Street but just 2.9pc in Grafton Street. Central Dublin office values fell 4pc.
"In the office sector, limited expansion of existing businesses together with few new occupiers continues to put downward pressure on office rent," Mr Tily said.
"On a more positive note, yields finally look to have stabilised after a volatile three years."
"Tenants are bargaining hard to win greater flexibility from landlords while a ban on upward-only rent reviews has made rental agreements more favourable," he added.