Property values to fall further in next 12 months
Further falls in commercial property prices and values are expected by a majority of estate agents during the next 12 months according to the latest membership survey by the Irish Auctioneers and Valuers Institute.
The expectation is widespread despite yields on almost all commercial properties already rising above 7pc and in many cases exceeding 8pc. Yields in some sectors are even above 9pc.
IAVI president Aine Myler says such high yields indicates the prospect for some good investment opportunities in 2010, provided of course that the product is made available.
Office rents fell by between 18.7pc and 31.0pc depending on property type and location. Prime Dublin offices now average €393 per sqm while similar space in peripheral Dublin locations averages €187 per sqm. Prime Connaught offices average €89 per sqm and older central offices in Connaught average €72 per sqm.
Reflecting falling prices, office yields range between 7.2pc in Connaught and Dublin to 7.6pc in Munster cities.
Retail rents continued to fall in 2009 -- by more than 20pc in parts of Dublin where neighbourhood shopping centres and retail warehouses, fell 33.3pc and 30.2pc respectively.
Munster prime retail was exceptional as rents declined by only 12.2pc, although high-street units in Munster towns fell by as much as 36pc. Shopping centre units in the Rest of Leinster saw rents fall by 35.7pc.
Reflecting the sharp decline in prices, prime Dublin retail yields have risen from 2.6pc in 2007 to 6.4pc. Outside of Dublin retail yields increased in prime city-centre units to 6.5pc in Munster, 6.4pc in Rest of Leinster and 5.6pc in Connaught.
After record falls in 2008, pubs continued to fall during 2009 knocking values from peak 2007 levels by 34.1pc in Munster, 35.9pc in Dublin, 40.8pc in Connaught and 44.6pc in the Rest of Leinster.
Similarly prices for Munster restaurants have not fallen as much as other locations, having fallen by 35.3pc since 2007 in Munster compared to 48.7pc in Dublin.