> Office take-up (new rental transactions) projected to be down 40% in full-year 2012 compared with 2011
> hardening of 0.25% in yields on prime retail and office, double digit yields still on secondary assets
> Investment market worth €135m for first half of 2012, including €27m for One Warrington Place, €36m for Riverside II and €40m for the Alliance/Gasworks apartment complex. Compares with €150m for first half of 2011.
> Amount of supply coming onto market has increased “markedly”
> Prime rents “stabilising”, secondary rents still in decline
> Prime Dublin office rents of €27.50 psf, prime Belfast €12.50 psf
> NAMA becoming more prominent in commercial market
With the economy still bumping along the bottom, at best, with the EuroZone lurching from one crisis to the next, with credit availability severely limited and really just Bank of Ireland, Barclays and now NAMA lending and an overhang of the wrong type of supply, times are still tough in the commercial property sector in Ireland – Northern and Republic. Property powerhouse and NAMA valuer, CB Richard Ellis (CBRE) has published its two-monthly report on the Irish commercial property sector which contains a couple of bright spots, but the bottom line is that signed activity is still declining, prices are at best stabilising though there is evidence of declines in secondary markets and transactions are taking forever to conclude.
With respect to NAMA, the recent announcement of the Agency making €2bn available for staple finance is noted with deep appreciation, and it seems that NAMA is bringing more product to market eg Fota Island resort, a range of other hotels including the Killerig and Edward Square Galway shops. NAMA was behind the sale of One Warrington Place, and the biggest rental in Q2, 2012 when 35,000 sq ft were let to BSkyB in Burlington Plaza – a deal that nearly didn’t happen until the IDA or politicians got involved. In Northern Ireland, there was the sale of a Sainsburys store in Derry for GBP 18m (€22m) to LaSalle Investment Managers – this store was owned by the McGinnis group which is now in NAMA, though that doesn’t necessarily mean the store was, the store is described in detail here. NAMA of course will be behind some development and refurbishment also as it has recently announced plans to invest €2bn over four years in its developers’ projects. NAMA has said that it paid €9.25bn for loans secured on commercial property in the Republic of Ireland, loans likely to be worth €6-7bn today, so it is obvious that NAMA is going to be a dominant player in the Irish commercial property market for some time to come.
It will be a couple of weeks yet before we start getting the commercial property indices for Ireland for Q2, 2012. NAMA is claiming/praying prices are stabilising, though the indices recorded falls in Q1, 2012. Jones Lang LaSalle reported that rents had increased in Q1, 2012 for the first time since 2008, but CBRE seems to be saying today that rents are still in decline in secondary assets which will presumably offset any stabilising on prime assets.