Values rise at last for investors

THE Irish property investment market turned around in the first quarter of 2003, with capital values rising 0.8% in the first increase since December 2001, according to the Investment Property Databank (IPD).

“These figures show the Irish property investment market is beginning to turn the corner.

However, it still has a good deal of ground to make up,” Mark Callender, IPD research director, said in a statement.

All three sectors of the investment market (office, retail, industrial), had positive total returns for the first quarter.

Although office returns were at their highest for over a year at 1.4%, they still significantly lagged the retail sector by 4.3%. Rental value growth slowed to 0.4% in the first quarter but was offset to some extent by a fall in yields of 0.03%.

“Significantly, this is the second quarter in succession yields have fallen, which may indicate market confidence is improving after 21 months of rising yields,” the IPD said.

Measured over a 12-month period to March 2003, total returns stood at 4.5%, from 4.7% for the year to March 2002.

Capital values declined by 1.0% as a marginal increase in rental values was more than offset by a 0.05% rise in yields.

Equity returns were once again negative as the threat of war in Iraq depressed global markets.

The IPD Irish Property Index measures returns to direct investment in property.

It is compiled from valuation and management records for individual buildings in complete portfolios, collected from investors by the IPD.