Irish commercial real estate values rose for the first time in six years in the third quarter on increasing demand for Dublin offices, Investment Property Databank Ltd. said.
The average value of stores, offices and warehouses climbed 0.3 percent in the three months through September, IPD said in a statement today. Total return, which combines changes in real estate values and rental income, was 2.6 percent, the highest since September 2007.
“Growth is creeping back to Ireland’s property market after six very difficult years,” Phil Tily, an executive director at London-based IPD, said in the statement. “The rewards of lowering stamp duty, the ridding of rent review legislation, maintaining corporation tax levels and successfully implementing austerity measures are now starting to pay off.”
Ireland’s property and construction industries are rebounding after the nation suffered the worst property crash in western Europe. The Irish economy went into recession during the global financial crisis as house prices plunged and unemployment soared.
IPD said its data mask a “far from standard recovery” as values of retail and industrial properties continue to drop, though at a slower rate. Demand for offices in Dublin from tenants and investors is driving returns, IPD said.
Ireland’s building industry expanded last month for the first time since the 2007 crash, Ulster Bank said on Oct. 14. The bank’s purchasing managers index for construction rose to 55.7 in September from 49.7 in August.
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