The Jones Lang LaSalle (JLL) report published yesterday showed that both capital values and rents were still declining in Ireland, though based on the experience of one quarter, the declines were moderating. There is a competing commercial property series for Ireland produced by Investment Property Databank (IPD) and the Society of Chartered Surveyors in Ireland (SCSI, the newly merged unit which brought together the old Society of Chartered Surveyors and the Irish Auctioneers and Valuers Institute) and it has been published this afternoon and is available here. This blog uses the JLL reporting to produce the NWL Index at the top of this page because it is usually published before the SCSI/IPD’s. Both series are referred to in NAMA’s Long Term Economic Value Regulations (Schedule 2).
The SCSI/IPD index confirms prices are still dropping, at 2.3% overall for the quarter which ended on 31st March, 2011. This compares with JLL’s own reporting yesterday which suggested prices were down 1.5% in the quarter. I haven’t tracked the SCSI/IPD index historically but I believe it would show we are now down by ~62% from peak, compared with 61% with JLL’s index. So over time, both indices show a strong correlation with each other.
The SCSI last week published its Quarterly Commercial Property Review which reflected the views of its members on aspects of the commercial property market. The Review is a private publication for SCSI members and has been monitoring the market for the past five quarters. It showed that overall transactions volumes are dropping, as are enquiries. Vacancy levels continue to rise. Lease lengths are falling which might be considered good news for commercial tenants but inducements are also coming down. Of the three basic commercial segments (office, retail and industrial) it is the office segment which looks the most positive in the sense of transaction volumes increasing. Overall it paints a sector still facing challenges. And with an anaemic economic environment and uncertainty over Upward Only Rent Review legislation, it seems that the sector will remain challenging for the next quarter or two at least.