There are two indices in Ireland, both quarterly, which track changes to prices of commercial property. The smaller 32 property sample index is that produced by property services giant Jones Lang Lasalle (JLL) and involves JLL’s people examining a portfolio of property and revaluing prices and rents. The larger 287 property sample index is produced by the Society of Chartered Surveyors in Ireland (SCSI – the merged body created earlier this year from the Society of Chartered Surveyors and the Irish Auctioneers and Valuers Institute) together with global property information company Investment Property Databank (IPD) The JLL index tends to be published each quarter before the SCSI/JLL index and because NAMA’s Long Term Economic Value Regulations makes reference to both as reputable sources of information, the JLL index is used to calculate the NWL index and also the performance of Irish commercial property shown at the top of this page. Both indices display a remarkable historical correlation – indeed at the end of Q1, 2011 the JLL index indicated Irish property was 60.9% off peak whilst the SCSI/IPD index was ~62% off peak.
On 12th July 2011, JLL reported its index for Q2, 2011 which showed a shock 5.7% decline in Q2, 2011 – the largest quarterly decline since NAMA was created in December 2009. Today the SCSI/IPD index was published for Q2, 2011 and it continues to mirror the JLL index, showing prices were down 5.3% overall in Q2, 2011 compared with 5.7% reported by JLL. In terms of peak to present, JLL is now down 63% whilst SCSI/IPD is down 64%.
JLL issue a commentary with their quarterly report and two weeks ago, it strikingly pointed out that commercial property may suffer an additional 20-30% decline in commercial prices if the Government implements plans to abolish Upward Only Rent Review leases, which would mean all commercial leases would be able to seek market rents.
