Returns up 6.1% in third quarter, says IPD

Offices continue to lead market due to impressive rental growth across sector

In many key markets, such as central Dublin offices, the main driver now is rental value growth

In many key markets, such as central Dublin offices, the main driver now is rental value growth

 

The report, compiled by international researchers MSCI, shows offices continued to lead the market in Q2, returning 6.4 per cent in the last quarter and 31.2 per cent year on year. This was directly due to an impressive rental growth across the sector.

Last week another property index, compiled by agents JLL, suggested overall returns were up 7.7 per cent in the third quarter.

The 12 months return for Irish commercial property of 28.5 per cent to the end of September was significantly higher than that of the UK which reached 15.3 per cent, according to the IPD UK Monthly Property Index.

Irish real estate also outperformed Irish bonds which returned 5.1 per cent over the last 12 months and Irish equities which returned 25.9 per cent.

Colm Lauder, senior associate with MSCI, said the latest Irish index showed a continuing strong performance by Irish commercial property, although the pace had slowed a little during the third quarter of 2015 as we began to see some stabilisation in the market.

Trend

The IPD index will in future include Hibernia REIT and Green REIT.

All future releases will include valuations of assets held by both REITs. In addition, MSCI will be including the performance measurement of residential assets for the first time.