Some Dublin rents among highest in EU despite decline
The relatively high rents for Dublin prime office and retail accommodation are highlighted by the latest Knight Frank summer survey of European rents and yields.
Dublin's prime shopping centre rents, at €3,750 per sqm per year, are the second-most expensive of the 25 cities surveyed and surpassed only by London's West End, where rents average €5,556 per sqm.
Parisian rents, at €2,000 per sqm, are little over half those in Dublin. Dublin shopping centre rents are the only ones to show declines.
Keiron Diamond, director at Knight Frank Ireland, points out that many distressed tenants have secured rent reductions or other forms of deals with landlords, some of whom, however, are reluctant to publicly acknowledge rent cuts.
The values of Dublin shopping centres have declined and this is also reflected in the yields, which at 7.75pc, shows the values are the fourth cheapest in Europe.
Some might argue that the high yields reflect the withdrawal of investors from the Irish market but that yields are therefore difficult to verify due to the lack of transactions.
Others can point to a similar CBRE survey last year, before the upward-only rent review became a government promise, which also showed a very low ranking in the European yields league for prime Dublin retail.
In contrast, Knight Frank's European Market Indicators report shows Dublin retail warehousing rents, at €100 per sqm, are among the cheapest in Europe and ranked 20th in the league, while prime yields for these properties at 8.25pc are the second-highest in Europe.
Dublin's office and logistical rents are more competitive than shops and this competitiveness should help attract job-creating inward investment.
Dublin prime office rents, at €376 per sqm, are the ninth-most expensive of the 25 cities surveyed, just ahead of Munich, Amsterdam and Edinburgh.
Prices for those buying Dublin offices are among the cheapest, with a yield of 7.25pc ranked the 20th in the league.
In the industrial sector, Dublin rents, at €75 per sqm, are close to mid-table at 11th-most expensive.
The survey shows that prime rents across all of Dublin's four key property sectors are declining, while yields across all sectors are increasing.
In the three months since the previous report, rental growth has been observed in a number of key European markets.
However, there has been little movement in prime yields.