Dublin retail property values and rents may have halted their three-year downward spiral, although upscale shops on Grafton and Henry Street are still suffering from falling values.
This is the first positive retail quarter since 2019,” said Colm Lauder, analyst at Goodbody Stockbrokers.
Total retail rents rose 0.2 percent in the quarter, while capital retail values rose 0.1 percent.
However, capital values at Grafton Street fell 0.4 percent and Henry Street fell 1.3 percent during the quarter, bringing their 12-month declines to 9 percent and 13.7 percent, respectively, according to the MSCI/SCSI Ireland Quarterly Property Index, the benchmark for investment, declined Irish commercial property performance.
The overall improvement in retail values can be attributed to other areas of Dublin city centre, where they are up 3.1 per cent for the quarter and retail inventory values are also up 0.2 per cent.
The former may be due to food and drink outlets in places like Dawson, Dame, and O’Connell Streets.
If that were the case, it could reflect improved values for landlords like Henderson Park, which owns The Ivy property on Dawson Street. Mr. Lauder points out that shopping center values have fallen 4.7 percent over the past 12 months, while retail park/warehouse values have increased 0.4 percent year-to-date.
“Despite continued declines on Dublin’s high streets, the rate of decline has steadily slowed since the initial sharp Covid-related correction in the second quarter of 2020,” he adds.
Beneficiaries most of the weaker retail activity were the industrial and logistics sectors, where rental growth was the strongest – up 0.9 percent in the first quarter as the shift to online shopping boosted demand for warehouse space.
As a result, logistics values increased 2 percent for the quarter and 15 percent for the 12 months.
Overall, office rents increased by 0.3 percent in the quarter.
While the value of Dublin offices stabilized at 0.1 per cent growth in the last quarter, their values are still down 0.5 per cent over the 12 months.
Suburban offices fell 0.5 percent in the quarter, bringing their 12-month reading to 1.4 percent.
SCSI and JLL’s Max Reilly says the outlook for second-quarter investments and leasing is also positive.
https://www.independent.ie/business/commercial-property/signs-of-a-floor-after-three-years-of-falling-retail-property-values-41601755.html Signs of a bottom after three years of falling retail property values