OVERALL RETURNS from the commercial property market fluctuated from gains of 30 per cent in 2006 to -40 per cent early in 2009 and were now back to -23.3 per cent, says property researcher IPD. It warns that falling rental values are driving negative capital growth across all sectors but better news is that yield impact is no longer having as strong an effect on values as in 2008.

The fourth quarter of 2009 was the least negative of the year but Ireland is lagging behind the UK in returning to positive territory. Capital values fell by 30 per cent in 2009 with the industrial sector down by 5.5 per cent compared to a slippage of 4.9 per cent in retail and -4.8 per cent for offices.

IPD said there had been a deceleration in the rate of rental falls in shopping centres and retail warehouses. Standard shops reported a downward trend in Q4 2009 but the retail sector has shown a significant improvement and a deceleration in yield impact. All retail sub-sectors currently sit very closely just below a zero decline. IPD says that falling rents were most severe in offices over 2009. Q4 had seen the first sign of real deceleration with all office grades in line at a rate of just over 8 per cent.