Decline in property returns eases

The rate of decline in returns on commercial property in Ireland has eased in recent months, according to a new survey.

The Investment Property Databank (IPD) index of the Irish market found that while property returns in Ireland continued to fall in the fourth quarter of 2009, the pace of decline has eased considerably and prime yields have begun to show signs of stabilising.

According to IPD’s figures, total commercial property returns for the 12-month period to December 2009 were down by an average of 23.3 per cent. cent Retail properties fell 25.4 per cent, while office properties slipped 22.1 per cent and industrial property returns declined 20.4 per cent.

However, the last quarter of the year showed a slowdown in the pace of decline, easing to 2.9 per cent compared to steeper declines in earlier quarters.

Director of research at CB Richard Ellis Marie Hunt said the figures were encouraging.

“While commercial property returns are still in negative territory in the Irish market, the fact that the pace of decline is easing quarter-on-quarter is very encouraging, suggesting that we are through the worst of the downturn and that values are now showing signs of stabilising,” she said.

“The UK property market has now experienced six consecutive months of positive property market returns and while the Irish market is lagging this recovery, it is encouraging that we now appear to be seeing the first signs of stabilisation emerging”.