A majority of chartered surveyors see prime office capital values dropping by up to 10 per cent this year, while 42 per cent expect a similar fall in prime office rental values, a new report has found.
The report from the Society of Chartered Surveyors Ireland (SCSI) found 53 per cent of chartered surveyors believe the market is in “early downturn” – up 15 per cent from last year – with a further 22 per cent reporting that the cycle is in “mid-downturn” phase.
Some 53 per cent of the 325 surveyors included in the study expect prime office capital values to decline by up to one tenth this year, while just under half (48 per cent) expect prime retail capital values to fall by up to 10 per cent.
On prime office rental values, 42 per cent expect to see a decline in values of as much as 10 per cent, while one in three surveyors forecast they will remain the same.
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Respondents were slightly more optimistic on the rental prospects for the retail sector, with 54 per cent forecasting prime retail rental values will be unchanged in 2023.
Views on the industrial rental sector were considerably more positive, with seven out of 10 respondents forecasting that prime industrial rental values will either remain the same or increase by 5 per cent in 2023.
‘Challenging year’
The SCSI’s Arlene Maguire said 2022 was “a very challenging year”.
“There was a sense of optimism as we emerged from Covid restrictions,” she said. “But unfortunately, Russia then invaded Ukraine, and we have all seen the economic effects that has had, especially concerning energy prices and inflation.
“The office market figures from the second half of 2022 showed the turning point that is now captured in the market expectations for the market into 2023, as the interest rate environment has shifted, and other factors have impacted overall sentiment among investors.”
