Grafton Street rents down 45pc from peak
Retail rents have fallen almost 40pc from their peak, although the pace of decline slowed in the first three months of this year.
According to the latest Lisney Rental Index, retail rents fell by 10.73pc during the first quarter of this year and by 28.23pc in the last 12 months. Since market peak in the latter half of 2007, the overall retail index is now down 39.77pc.
The agency points to falling retail sales and business closures as key factors affecting rents. Lisney spokeswoman Aoife Brennan reports that Grafton Street has been badly affected, with an unprecedented number of stores currently available.
"During the quarter, Grafton rents fell at a slower pace than in Q4 2009, falling 7.69pc compared to 10.34pc in the last quarter of 2009. Henry Street rents also continued to fall at a slower pace with a Q1 decline of 10pc," she adds.
In the last 12 months, Henry Street declined 28pc, just greater than Grafton Street where the index fell by 25pc. Typical Zone A rents on Henry Street and Grafton Street are now in the region of €4,500 psm and €6,000 psm respectively, significantly below market peak of €6,500 psm and €11,000 psm.
High street rents in Cork, Limerick and Galway are also falling at a slower pace with an average decline of 8.15pc in Q1. Limerick faired the worst, closely followed by Galway. Since market peak, provincial high street rents are now down 36.73pc.
Commenting on the overall market, managing director Peter Stapleton said the commercial rental market continued relatively inactive in Q1. "Occupiers persisted in cutting overheads with many trying to off-load surplus accommodation. Vacancy levels once again increased across all sectors of the market and lease terms remained very tenant orientated with exceptional incentives on offer. Lisney's composite index of all commercial rents fell by 8.77pc in Q1 and by 27.17pc in the 12 months to the end of March 2010. From market peak in 2007, the index is down 41.12pc," he adds.
He also reports a slight acceleration in the pace of rental decline in the office sector. Nevertheless he points to a 60pc increase in take-up activity compared to Q1 2009 although current take-up is well down on previous years.
Since 2007, office rents have fallen 46.52pc. Dublin city centre vacancy is at an all-time high of 18.4pc and consequently, rents in Dublin 2/Dublin 4 fell 6.99pc in Q1.
In spite of escalating vacancy rates, industrial rents have faired better than other sectors.
Since market peak of 2007, industrial rents have fallen by 26.21pc and 5.7pc in Q1.