Sunday 18 August 2019

Irish investors enjoy up to 7.8pc first-quarter return

Stock image
Stock image
Donal Buckley

Donal Buckley

Irish commercial property investors may have enjoyed a total return of 7.8pc in the year to the end of the first quarter of 2019 according to the most recent MSCI Irish Index.

Marie Hunt of CBRE says that this is a level of return that compares very favourably with returns from real estate in other jurisdictions and with returns from other forms of investment in this extended low interest rate environment.

Meanwhile JLL's Irish Property Index showed a more modest overall return of 6.1pc in the 12 months to the end of March after a 0.6pc return in the first three months of the year.

Whilst capital value growth has been limited, a 7.1pc increase in income in the last 12 months is reckoned to have driven the growth in overall returns.

Hannah Dwyer, director and head of research at JLL Ireland said whilst returns remain positive, increases are more subdued compared to the last quarter of 2018 and the same period last year, which had annual returns of 8.4pc and 10.7pc respectively.

Overall capital value growth in the first quarter was 0.6pc and 2.2pc in the last 12 months. In terms of sectors, industrial had the strongest capital value growth in the quarter of 2.9pc, followed by offices at 0.3pc and retail 0.2pc.

Overall rental values remained relatively steady, increasing by 0.1pc in the quarter and 1pc in the year. Retail and office equivalent rents remained unchanged.

Overall income has continued to increase, with growth of 1.7pc in the quarter, and 7.1pc in the year.

Ms Dwyer expects overall returns to remain positive for 2019, albeit at a more modest rate than in recent years.

Indo Business

Also in Business