Irish commercial property is beginning to show signs of reaching the bottom, based on an initial reading of the latest SCSI/IPD Ireland Quarterly Property Index.
However a spokesman for the Society of Chartered Surveyors Ireland says that it's still too early to call the bottom as the market is awaiting clarification of some Government policies.
These policies include promised changes to the laws on upward only rent reviews which some agents say are undermining investor confidence and are discouraging them from buying.
According to the index, which is compiled by the London-based Investment Property Databank, returns in the first three months of this year were unchanged -- the first time they have not fallen in 15 months. IPD attributes the neutral return to a slowdown in capital depreciation, rather than a positive improvement in values.
Commercial property values continued to fall -- down 2.3pc. Within the sectors, property values fell by between 2pc for offices and 2.7pc for retail.
Rents fell by 3.4pc in the quarter and are blamed for the fall in values. On a more positive note the pace of rental decline slowed from 4.9pc in the last quarter of 2010.
Since December 2008 rents have fallen 39.5pc. Yield impact, which measures the influence price changes have on values, fell by only 0.2pc in the three months to the end of March.
Within the sectors both the offices and industrial sectors showed positive returns of 0.5pc and 0.3pc respectively but retail returns fell 0.6pc.
Rents fell in all three sectors, albeit at a slower pace with the fall in retail rents slowing from 4.9pc to 2.9pc. Office rents fell 3.6pc and industrial rents 4.6pc. Phil Tily of IPD says "The moderate easing in rental value declines has led to a slowing in the rate of capital depreciation in the market. While there is still a long way to go for Irish property, it is encouraging to pick up on improving themes."
Peter Stafford, director of policy at SCSI, said; "Many uncertainties remain and these continue to undermine investor confidence in Ireland.
Nonetheless some transactions are beginning to take place and as the new government takes shape, movement in the market should become more widespread."
Equities, with a 0.6 pc return, outperformed property in the quarter.
However over five years property, with a minus 8.2pc annualised return, outperformed equities' minus 16.4pc annualised return. Bonds suffered a minus 5.1pc return in the quarter and 2.4pc annualised over five years.