THE overall property returns for 1995 reached 12.7 per cent, according to Jones Lang Wootton's Irish property index, which is published today. The findings show the steady growth achieved in 1994 continued last year but at a slower pace.
There were substantial increases in capital values in 1994, as yields in all sectors were sharply adjusted following a recovery in confidence. For that reason, it was always likely that 1995 would be a slower year for capital growth. Capital values rose by just over 4 per cent in 1995, significantly behind the 9 per cent achieved in 1994.
The best performer in capital value terms was the industrial sector where values rose by almost 7 per cent.
Retail property put in a steady performance last year with a rise of just over 5 per cent in capital values. Offices showed an increase of just over 3 per cent.
JLW says that since the capital adjustments of 1994, the market has been awaiting a phase of rental growth. "1995 generally did not deliver on this." Estimated rental values rose by just under 2 per cent in 1995, with the strongest growth coming from industrial and retail property.
The index shows that Grafton Street continued to lead the way in the retail market, while industrial rental growth occurred in the second half of the year, based on a growing-shortage of quality space. Market sentiment about the prospects for office rents was good throughout the year but until the very last month of 1995, there was no real evidence to support the optimism. There was effectively little growth in estimated rental value of offices in the index as a result.
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