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Hotels in the west suffered sharp 45pc price drop last year

Donal Buckley

Published 01/02/2012 | 05:00

Hotels in the west of Ireland suffered the sharpest falls in prices in 2011 compared to any other pubs or hotels in other areas of the country or cities.

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In Connaught/Ulster, hotel prices fell 45pc in 2011, exacerbating the falls of 30pc and 32.5pc seen in the previous two years. This is among the findings of the latest property survey by the Society of Chartered Surveyors in Ireland (SCSI).

In contrast, prices for Dublin hotels, restaurants and prime rural pubs confined their falls in a range of between 2 and 4pc after recording falls of 20pc plus in the previous two years.

SCSI members reported many closures of pubs in 2011 due to loss of business to off-licences. The low levels of sales also makes it difficult to assess realistic prices for pubs.

Georgian offices showed the sharpest decline in values in the Dublin office market in 2011 with yields extending from 8.5pc to 9.1pc. In contrast, yields for prime Dublin offices slipped from 7.4pc to 7.5pc.

Munster offices fared worse with Georgian yields extending from 9pc to 10pc, while prime Munster office yields extended from 8.2pc to 8.7pc.

Prime rents

SCSI vice-president, Roland O'Connell, said activity in the commercial property market was low in 2011 primarily due a lack of confidence, difficulties in accessing finance and the uncertainty in the market about a potential retrospective banning of upwards-only rent reviews in pre-2010 leases.

In Dublin, rents for prime third-generation offices declined to €320 per sqm in 2011, compared to €355 in 2010 and €393 in 2009.

In Dublin, prime retail rents declined to €4,532 per sqm in 2011, compared to €5,355 per sqm in 2010 and €7,042 in 2009.

In the rest of Leinster, prime retail city rents declined to €374 per sqm in 2011 from €555 in 2010 and €562 in 2009. In Munster, prime city retail rents declined to €974 per sqm in 2011, compared to €1,540 in 2010 and €1986 in 2009.

In Connaught/Ulster, prime city retail rents were €1813 per sqm in 2011, compared to €2,055 in 2010 and €2,865 in 2009.

The development land sector also saw little activity and continuing price falls. Apartment development sites suffered the sharpest falls down by 40pc plus in Leinster, Munster and Connaught. In Dublin the segment recorded a 31pc fall after sharper falls in the preceding years.

With some interest in office and housing development land in the capital, prices for these site fell less sharply - 23pc.

Supermarkets and filling stations are showing some interest in prime locations.

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