The returns from the commercial property investment market continue to improve as we move towards year end. Overall returns for the 12 months up to the end of September reached 22.8 per cent, according to the Irish Property Index. This figure showed an improvement of 1.4 per cent over the returns to June.

The market showed a return of 5.4 per cent in the third quarter this year. Capital values continued their upward trend, rising 3.5 per cent over the three months, taking the index value to over £1 billion. Movements in the retail market remained virtually unchanged from the last quarter. A return of 4.5 per cent was the result of a 2.8 per cent improvement in capital values and a 1.8 per cent income return. Offices continued to rank as the second-best performing sector of the market, recording a return of 5.8 per cent over the last quarter. Rental growth of 3.2 per cent was 1.2 percentage points up on the June quarter and, combined with a yield reduction of 0.06 of a percentage point, produced capital growth of 3.9 per cent. Over the last 12 months, offices have recorded the highest sector return of 23.8 per cent. Underpinning this performance, capital values have risen by 15 per cent, boosted by a 11.6 per cent increase in rental values.

With a return of 6.3 per cent, industrials enjoyed their best quarter on record, comfortably outpacing both retail and office properties. Rental growth of 3.1 per cent was on a par with the last quarter. Coupled with this, yields were marked down a further 0.08 of a percentage point, generating capital growth of 4.1 per cent. For the year ending September, 1997, industrials show return of 23.7 per cent, trailing offices by a mere 0.1 of a percentage point.