Property sector struggling outside Dublin

Two new reports show that all sectors of the property market continue to struggle, although there are signs that the Dublin industrial property market could be close to stabilising.

New figures released by GeoDirectory reveal that 5,620 new buildings were added to the national stock over the first six months of 2012, which is a 23% drop on the first six months of 2011. There were 1,889,143 buildings in the Republic at the end of June.

There has been a 94% drop in the number of new buildings completed over the first six months of 2012, compared with the same period in 2007.

Residential premises represented 4,837 of the buildings added in the first six months of the year; there 590 commercial buildings and 193 dual purpose buildings.

Cork city and county saw the biggest rise in buildings, where 777 residential and 69 commercial properties were completed in the first half of the year. Kerry saw a year-on-year decrease of 91% with just 30 residential and five commercial buildings completed in the first six months.

Vacancy rates for the new builds stood at 12% at the end of June with the highest vacancy rate of 20% recorded in Leitrim.

GeoDirectory, a joint venture between An Post and Ordinance Survey Ireland, organises a national database of commercial and residential properties.

A separate report released by the property consultants CBRE, showed an 11% fall in the Dublin office market in the second quarter of this year, compared with the second quarter last year.

However, there was a 21% increase in Dublin office letting activity compared with the first quarter of this year.

CBRE estimates letting activity in the Dublin office market this year will reach 100,000 square metres, compared with 160,000 square metres in 2011.

Eurozone woes and incentives by landlords to stick with existing leases are seen as the two biggest factors weighing on activity.

The BSkyB deal at the Burlington Plaza, the Merck Sharpe & Dohme deal in Red Oak North and the Irish Life & Permanent deal in Dublin 2 were among the biggest transactions over the quarter. Prime rents in the Dublin office market were €296 per square metre at the end of June and are expected to stabilise at these levels, although the Dublin 4 area is seeing upward pressure on rents.

Another CBRE report showed the Dublin industrial property market registered its biggest upsurge in activity in four years during the second quarter of 2012. Over 67,000 square metres of industrial accommodation was let or sold over the second quarter, which represents a 100% increase on the same period in 2011 and a 140% increase in the volume of transactions over year-ago levels.