Irish commercial property investors reaping strong returns

According to the new IPD/Society of Chartered Surveyors index, those who have invested in Irish commercial property have achieved far better returns that those investing in shares.

Returns from property investment were shown to be higher than returns from Irish company shares during the last 12 months and over the last five years.

The index also showed that income returns from Irish commercial property averaged 2.3 per cent across all sectors over the last three months.

Despite falls in capital values for all sectors, the drops were far more modest than those in Irish bonds and equities.

During Quarter Three of this year, capital values fell by 2.6 per cent at an overall level as well as for the retail sector of the property market. Capital values for offices fell by 2.3 per cent over the same time frame.

SCS president Peter Stapleton said, “Despite the overall falls this quarter, yields of prime, well-let city centre properties are stabilising.

“We expect that the market will produce more supply of investment property during 2011 which will satisfy some latent demand from cash buyers,” he added.

CB Richard Ellis believes that office yields have narrowed over the last three months, suggesting that values may be improving.

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