MarketReport: Figures released today by Experian®, through its European property forecasting service, predict that total returns for offices in Dublin, for the period 2006 to 2010, will average 13.3 per cent per annum.

This forecast return puts Dublin ahead of London's West End and Paris, where average returns are forecast to be 13 per cent and 9.7 per cent respectively over the same period. Despite this strong performance, Dublin still fails to attract as much interest from foreign investors as either London or Paris.

The report estimates that office returns from all European markets will experience a slowdown over the next few years but Dublin, which has been the strongest performer in Europe in terms of total returns, will continue to outperform other European cities.

Experian estimates that investment returns in Dublin will be 13.3 per cent in 2008, before falling below 10 per cent in 2009 and 2010, which compares favourably with much more high-profile markets in Europe.

However, market evidence suggests that occupier demand for office space in Dublin is stable and mostly confined to the city centre, factors which have resulted in upward pressure on rents.

Experian warns that, although Dublin returns are high, stronger rental growth is restricted by a vacancy rate which is quite high when compared to other European capitals.

Liam Ready, director of business information, Experian Ireland, says: "Office returns are not likely to match the strong year that we had in 2005, when returns averaged 23.7 per cent but they won't fall all that short in 2006, estimated to come in at 21.1 per cent.

"Returns will remain amongst the highest in Europe over the 2006 to 2010 period and should advance the returns received in London's West End and Paris."