Strong Start To 2015 For Property In Dublin's Fair City

According to the latest Irish Property Index published by international real estate researchers JLL, capital values for commercial property increased 2.4% in Q1 2015, representing a whopping 25.9% in one full year.

Investors in Ireland's commercial property enjoyed a 4.1% increase in returns during the first quarter of 2015 say JLL, indicating a strong start to the year.

In the first three months of the year, overall rental values increased 7.1% with offices recording the most growth at 11.8%. Rents for industrial premises rose by 2.8% followed by the retail sector which registered an increase of 1.8%.

JLL reported an increase in returns of 35.2% in the 12 months to the end of March, primarily driven by strong results in the two final quarters of last year.

Dublin has seen the most growth in both its commercial and residential property markets over the last year. Euro weakness against sterling for the initial months of 2015 has considerably boosted interest from British investors.

The Labour Party is to rent the entire top floor of Dublin's Bloodstone building for €484 per square metre in a move to the penthouse office space in the trendy area of the docks.

Another office block in Dublin, George's Court, currently 65% occupied with tenants including the Office of Public Works and the Law Society of Ireland has recently been sold to Norwegian investors for €29m.

Ireland's hospitality sector has also recorded strong growth over the last year, now turning over some €7.6bn annually, expected to rise to €7.9bn by the end of 2015. Business tourists are among the majority of visitors, particularly to Dublin and numbers have been boosted by an expanding commercial centre.

Prices for Ireland's residential property increased 22.4% throughout 2014, raising concerns of a possible property bubble. However, prompt action by the government to cool the market seems to have made an impact particularly in the residential market, where domestic buyers are in the majority.

Foreign investment is expected to buoy Ireland's property markets further in 2015, with commercial investment positively impacting the residential sector. A rapidly improving supply and demand dynamic combined with currency weakness is proving to be an attractive climate for wealthy overseas investors.