Pace of property value decline slows to 3.2pc in first quarter
Irish commercial investment property values fell by an average of 3.2pc in the first quarter of this year according to the authoritative MSCI benchmark published in conjunction with the Society of Chartered Surveyors Ireland.
A welcome aspect of the index is the slow down compared with the 4.5pc pace of decline in the previous quarter and this curtailed the annualised rate of decline to single digits at 9.4pc.
Offices remain the weakest sector, with values down 4pc in the quarter and 11.5pc over the 12 months. Colm Lauder of Goodbody stockbrokers attributes this to older office stock with the value of 1980s offices falling 5.5pc, while those built in the 2000s fell by 3.6pc.
Surprisingly, Dublin 2 offices, long considered the prime Dublin office sector, turned in the weakest performance of the sector in the quarter with a 4.5pc drop. However the area’s 12-month fall of 11.9pc was better than the 12-month fall seen by Dublin 4 offices of 15.1pc.
Mr Lauder says new structural fears continue to arise from an asset quality perspective, with softening demand from tech occupiers and employees working from home especially affecting suburban offices.
The retail sector outperformed the overall index as average values fell 2.3pc in the quarter and 8.4pc over 12 months, but this decline was exacerbated by a 5.4pc drop in Henry Street where the annualised rate fell by 11.5pc.
Retail neighbourhood property was the best retail sector, falling only 1.4pc in Q1.