# Commercial Property Sector - How's it doing?



## rainyday (14 Jul 2002)

Has anyone got any interesting stat's on how the commercial property sector is doing? Each day, I pass a large number of <!--EZCODE BOLD START-->* empty*<!--EZCODE BOLD END--> office developments. Several of these substantial buildings (4-storey) have been empty since they completed 18-24 months ago. I can only imagine that there are some badly burnt investors hanging out there waiting to get some tenants into their properties - Am I right?

Regards - RainyDay


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## Dynamo (4 Feb 2003)

*Commercial Property*

Hi Rainyday,

Why would anyone give business to a pathetic link such as the last one? Sigh.

Anyway ... The Irish market commercial property market gave a return of around 2% last year - rental income was offset somewhat by falling capital values. Retail sector held up well (Grafton St shops still selling for higher prices than expected), but office and industrial values fell.

Vacancy rates are not a problem in retail, or in city centre offices, but are very high in suburban offices (you can see the "to let" signs in any suburban campus you choose) and industrial.

The slowing economy and retrenchment by corporates is taking its toll. The government was unaffected in its take up of property space until recently, but has also announced that it will cut back. Finally, Charlie's ill-advised increase in the stamp duty rate knocked 3% off capital values at a stroke, and also gave further impetus to the tide of investors heading towards the UK, by creating a 5% return hurdle between Irish and UK stamp duty rates.

I'd say most market participants expect a sideways move over the next couple of years - a bit less if the economic outturn is worse than expected, a bit more if it's better - but neither a boom nor a bust. Developers who haven't let their developments will be under real pressure in a lot of cases.


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