Jones Lang Lasalle (JLL) has today published its commercial property series for Ireland for Q1, 2012. The JLL series is one of the two Irish commercial indices referenced by NAMA’s Long Term Economic Value Regulations (Schedule 2) and is used to help calculate the performance of NAMA’s “key markets data” shown at the top of this page. The other quarterly Irish price series is published by SCSI/IPD and will be available on Thursday 26th April 2012 at 3pm; because it is generally published after JLL’s, it is not used here to help compile the NWL index, but the SCSI/IPD index does historically show a very close correlation with JLL’s.
The JLL Index shows that capital values fell in quarter one, 2012 by 1.8% – this means that with the exception of Q4,2011 Irish commercial property has declined in value for 18 of the last 19 quarters and the aberration in Q4,2011 when a 1.2% increase was recorded was due to the exceptional measures set out in Budget 2012 – the reduction in stamp duty on commercial transactions from 6% to 2%, the abandonment of proposals to abolish Upward Only Rent Review terms in pre-February 2010 leases and the enhancement of capital gains arrangements for commercial property held for several years.
Overall since NAMA’s Valuation Date of 30th November, 2009, prices have now declined by 22.0%. Commercial prices in Ireland are now 64.9% off their peak in Q3, 2007. On an annual basis prices are down by 10.2%. The NWL index is now at 817 which means that NAMA needs to see a blended increase of 22.3% in property prices across its portfolio to break-even at a gross profit level (taking into account the fact that subordinated bonds will not need be honoured if NAMA makes a loss).
Rents increased by 0.7% in the quarter which is the first increase since Q2,2008. JLL says “Overall the Index results are best described as stable which, given past fluctuations is encouraging for the commercial property market in Ireland.”
UPDATE: 27th April, 2012. Yesterday, Ireland’s other commercial property index – the one produced by the Society of Chartered Surveyors in Ireland, in conjunction with industry researcher IPD, – was published. It showed that in Q1, 2012, commercial property prices fell by 1.8%, precisely the same decline recorded by JLL. To date SCSI/IPD say that commercial property is now 65.2% down from peak compared with 64.9% from JLL.
NAMA Wine Lake 
A little off topic:
“An Taisce said 40% of the €75bn property portfolio transferred to Nama was categorised as “development land” which will be reclassified to agriculture over the coming years. This will result in the value of Nama’s development land plummeting from a paper figure of €30bn to a single-digit figure, costing tens of billions in losses for taxpayers over generations.”
Read more: http://www.irishexaminer.com/ireland/land-was-zoned-to-cater-for-4m-extra-people-190855.html#ixzz1sLKf8Eet
@Jake, that is true but NAMA say that they valued some development land at agricultural values anyway and agricultural land has increased in value since November 2009. Trouble is, we don’t know how much development land was valued at agricultural values – was it 5% or 95%, so we don’t know where the loss will fall, at NAMA or at the banks from which NAMA acquired the loans, if the latter then the loss should already have been crystallised, if at NAMA we have another nasty shock in store.
A modest proposal:
http://www.washingtonpost.com/opinions/fix-income-inequality-with-10-million-loans-for-everyone/2012/04/13/gIQATUQAFT_story.html