Surveyors expect office and retail rents and values to fall
Footfall in Dublin's city centre has decreased dramatically since Covid-19. The office and retail sectors are expected to see falls in both rents and capital values during the year. Photo: Collins/Gareth Chaney
The office and retail sectors of the Irish commercial property market are expected to see falls in both rents and capital values during the year while both prime and secondary industrial properties are expected to see growth. These are among the findings in the latest Commercial Property Monitor published by RICS in conjunction with the Society of Chartered Surveyors Ireland.
Outside the mainstream, capital values are also expected to increase for data centres and to a lesser degree for nursing homes and multi-family investments. At the other end of the spectrum, projections remain negative for hotels and student housing, although not as much as in previous monitors.
Its Occupier Sentiment Index showed net balances for tenant demand of minus 27pc and minus 60pc respectively across offices and retail. As a result respondents foresee office rents declining for prime by 2pc and secondary by 5pc this year. Even sharper 8pc rental declines are expected for prime retail and 11pc for secondary space.
In contrast, projections were upgraded for industrials to 5pc growth for prime and 2pc increase for secondary.
Meanwhile, the Investment Sentiment indicated capital values for prime industrial could increase by 5pc.
Prime office values are expected to fall by 2pc but that is less severe than the 3pc which had been expected last December while secondary office values may fall 5pc. Prime retail values could fall by about 6.5pc and secondary by 11pc.
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