Commercial property returns for the 12 months up to the end of June showed a growth of 21.4 per cent, according to the Irish Property Index. The market has been characterised by a relatively narrow range of returns, with 0.6 of a percentage point separating the three key sectors.
Industrials remained in front with 21.7 per cent, followed close by offices on 21.6 per cent and retails at 21.1 per cent.
The market continued to prosper in the second quarter of 1997, showing a return of 4.9 per cent. Although rental value growth slowed down to 1.7 per cent, yields were reduced by 0.09 of a percentage point to produce capital growth of 3 per cent.
Industrials were the top performing sector in the second quarter, delivering a return of 5.4 per cent. Capital growth accelerated to 3.2 per cent, underlying a similar improvement in rental values.
Yields remained largely unchanged, ending the quarter at 8.8 per cent.
With a return for the quarter of 5 per cent, offices improved on their position at the end of March. Office values climbed 3.1 per cent as rental value growth of 2 per cent complimented the 0.09 percentage point fall in yields.
After a relatively strong performance in the first three months of the year, retail returns dropped to 4.6 per cent. Rental value growth continued to tail off, standing at 0.9 per cent.
Yields, however, continued to fall a further 0.12 of a percentage point, generating capital growth of 2.8 per cent.
On an annual basis, all three sectors improved on their performance at the end of March.
Offices led the way in terms of capital growth, with values up by 12.8 per cent, reflecting a 9.5 per cent increase in rental values.
Industrials, however, maintained their lead on the strength of their income return.
Ireland maintains its lead over Britain, which reported overall returns of 12.2 per cent over the year to June. Irish property also compared favourably to gilts, which yielded a return of 11 per cent but remained below equities, which returned 36.8 per cent.
The index is produced by IPD in conjunction with the Irish Society of Chartered Surveyors.
