Dublin prime office values are up by 3pc
For the first time in three years the values of prime Dublin offices showed an increase -- up about 3pc in the third quarter of the year as yields contracted from 7.5pc to 7.25pc. Nevertheless they remain the seventh cheapest offices among those surveyed in 46 cities in Europe, the Middle East and Africa (EMEA).
According to Marie Hunt, director of CB Richard Ellis, which conducted the survey, the improvement reflects the offers that overseas buyers are making for prime Dublin offices, although there are very few prime offices being sold. Retail yields had shown a similar improvement in the previous quarter to 6.25pc but Ms Hunt says she does not expect a further improvement in values during the fourth quarter of the year in either sector.
"With rents falling, overseas investors are realistic about rents and instead are being driven by where yields are at relative to the low interest rates for borrowing in Germany and the UK. Furthermore, as Dublin values have shown some of the sharpest falls from peak, they (the investors) see better prospects for appreciation," she added.
The survey also shows that despite the reduced yields, prime Dublin retail property is still the fourteenth cheapest of the 46 EMEA cities. On the other hand, prime Dublin retail rents, at €2,467.50 per sqm, are now 15th most expensive. This is just above their 16th position in the Q2 survey but well below the fifth position at the peak of the market.
Although prime Dublin office rents were unchanged in Q3 at €376 per sqm, their competitiveness has deteriorated as they have risen in the rankings from 16th to 13th most expensive.
In the industrial market rent and yields are unchanged for the quarter and at €82 per sqm rents for prime sheds showed a slight improvement in competitiveness as they moved down the rankings from seventh to eight most expensive.