Prime rents up 3.6% this year, says survey

RENTS in the prime end of the commercial property market rose by 3.6 per cent in the six months up to July last, according to the latest rental indices from Lisney. The composite index for the office, retail and industrial sectors now shows that rental levels increased by 6.4 per cent over the previous 12 months. The agency says the unprecedented letting and development activity in the retail market continued with the highlight being the opening of the new Marks & Spencer flagship store on Grafton Street, the extension of The Square in Tallaght and the opening of the Blanchardstown Town Centre. The new shopping centres which will follow at Jervis Street and Quarryvale "may add some uncertainty".

It appeared certain that the Jervis Centre would have a strong positive effect on Henry Street with Zone A rents rising and yields continuing to drop. Demand was still ever present on Grafton Street but there was no market evidence to show higher Zone A rent levels. However, the agency anticipated that deals would come through during the last quarter of the year.

The Georgian office sector, while experiencing enthusiasm from owner-occupiers and investors, was not greatly favoured by lessees. The healthy state of the general market had induced a modest increase in rent levels. Lisney said the lack of good quality industrial units, together with the increased demand already seen, had resulted in an improvement in rent levels to £6 per square foot over the first six months of the year. Industrial estates, such as Airways at Santry, were being favoured, yet Sandyford remained the most sought after location and commands a 10 per cent premium in rent levels.