Commercial property sees 6.2% growth in Q4 2015 overall returns

The commercial property market is continuing to perform strongly with overall returns up by 6.2 per cent in the last three months of 2015 and by 25.5 per cent in the year as a whole.

The JLL Irish Property Index, published today, shows that capital values increased by 4.7 per cent in the final three months and by 18.2 per cent through 2015. This was driven by growth across all three sectors with industrial recording the strongest increase of 22.6 per cent following by offices (+19.3 per cent) and retail (15.7 per cent).

The study showed that overall income increased for the second consecutive quarter, rising by 1.2 per cent in Q4. Despite this increase,annual income across the portfolio remained 1.7 per cent lower than in 2914.

Overall rental values increased by 3.6 per cent in the final three months of the year and by 17.2 per cent over the twelve month period. Offices showed the greatest increase (+24.4 per cent) followed by industrial (+16.5 per cent) and retail (+7.7 per cent).

Hannah Dwyer, associate director and head of research at JLL, said the strong overall returns continues to be driven by increases in capital values with growth across all sectors. Overall capital values increased by 18.2 per cent in 2015 compared with 41.7 per cent in 2014. Although this was still strong growth, the pace of increase was starting to stabilise. |It was worth noting that the increases in values were from a low base. Rental values were growing quite strongly and were likely to be a driver of capital growth in 2016.