Values fall for fifteenth consecutive quarter
Irish commercial property values continued to fall for the fifteenth consecutive quarter in the three months to the end of September this year when a 4.6pc decline brought to 64.9pc the fall suffered from the market peak.
These are among the latest findings from the index compiled by the Investment Property Databank (IPD) and the Society of Chartered Surveyors Ireland.
Overall market returns fell 2.3pc for the three months to September but there were no recorded transactions in the dataset for the second consecutive quarter.
The continuing declines in consumer spending took their toll on the retail market, which saw the steepest falls in capital value last quarter, down 5.2pc. Difficulties faced in the occupier market were evidenced by rental values falling a further 4.4pc.
Across more specific locations, Grafton Street and unit shops outside Dublin were the hardest hit, with rental values down 5.9pc and 6.1pc respectively. Performance of shopping centres also suffered this quarter, where values were down 6.3pc most of which resulted from an adjustment in yields.
The office and industrial markets, in contrast, saw a slight improvement on the previous quarter, where rental value decline in each case slowed to 3.3pc, the smallest quarterly reductions reported since December 2008.
Phil Tily, IPD managing director for UK and Ireland said, "The ongoing Euro-zone crisis, coupled with challenges in the local economy and the lack of clarity regarding the draft bill for the Government's rent review policy, has continued to unsettle the market.
"Consumer confidence is clearly dropping away with austerity measures putting a squeeze on disposable incomes, resulting in retails falling 3.2pc in the quarter -- their weakest figure for two years."
Hugh Markey, chairman of the SCSI's Commercial Agency Professional Group said: "What the market needs most at the moment is certainty and transparency.
"We, in the Society, are looking forward to the government's draft bill on rent reviews, because while there are elements that may be uncomfortable for landlords and tenants, at least it will bring a degree of closure to the issue.
"We also look forward to the enactment of the Property Services (Regulation) Bill which will produce a publicly available database of all commercial property leases, rents and transactions.
"This database will make a massive impact on bringing knowledge and transparency to the property market. While there is some interest in investment in commercial property, converting them into actual transactions remains very difficult.
"Converting enquiries into sales will need confidence-building measures, some light at the end of the tunnel on bank reform, the long-promised legislation and measures in December's Budget to the reduce stamp duty in commercial property to UK levels."