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Irish Property produces double the return of the UK over 12 months

Strong performance in Ireland’s commercial property market has continued throughout 2015, albeit at a slightly slower pace than was seen last year. According to the latest results of the IPD/SCSI Ireland Quarterly Property Index, total returns from Irish investment property grew 6.1% in the quarter to September 2015, down slightly from the 6.7% recorded in Q2.

The latest data show that in the 12 months to the end of September 2015, total returns for Irish commercial property were up 28.5%, which is almost double the 15.3% figure recorded in the UK for the same period. Q3 returns were notably more balanced across Irish property types, with retail, office and industrial sectors recording quarterly growth of 5.8%, 6.4% and 4.8% respectively.

Offices continued to lead the market in Q3 as capital values increased by a further 5.2% meaning that they are now just over 40% off the 2007 peak, compared to 65% two years ago. This growth has been driven by a strong rental growth as positive economic performance in recent years has led to increased demand for office space and supply shortages prevail in many areas. Rental values for office properties increased by 3.8% in Q3 or 23.1% year-on-year, far outperforming 12-month rental growth for both retail and industrial properties of 4.1% and 6.4% respectively.