A round-up of this week's commercial property in brief ...

Warehouse for sale/rent Office costs drop in Dublin 100m plan for Baggot Street Costa Coffee for D2 corner Capital growth in Switzerland

Sharp fall in industrial rents

Rents in the commercial property market fell by 18.35 per cent in the 12 months up to the end of March, according to the latest rental index from Lisney estate agents.

Rent levels showed progressive falls over the four quarters, starting out at 1.36 per cent, moving up to 2.69 per cent, then 6.19 per cent and ending up with a 9.33 per cent drop. A fall of this magnitude over a single quarter is without precedent since Lisney started recording rental indices in 1968 and reflects the crisis the Irish economy is facing,” according to Lisney.

The report shows that only 16,026sq m (172,502sq ft) of office space was taken up in the first three months of this year and, if lettings continue at the same pace for the remainder of the year, then activity levels will be back to what they were in 1990 or 1992.

The agency estimates that there is now 610,500sq m (6.571 million sq ft) of vacant space in Dublin, or 18.6 per cent of the total market. Rental values in the last quarter were down by 16.6 per cent.

Office costs drop in Dublin

Meanwhile DTZ’s report on global office costs shows that Dublin has dropped two places in the overall rankings and now stands in 17th place after Zurich.

Ronan Corbett of the agency said that, while Dublin was seen to be more competitive, the study did not highlight the amount of incentives being offered to tenants, such as rent-free periods and fit-out allowances. Ireland’s low corporate tax rate and the fall in office costs made Dublin a very competitive place to do business.

Warehouse for sale/rent

Agent William Harvey Co is quoting a price of €3.6 million or a rent of €230,000 for a modern detached warehouse extending to 2,070sq m (22,281sq ft) at Heaney Avenue in Park West Industrial Park in west Dublin. The building has excellent load access with three dock levellers and one grade door. The internal eaves height is 7 metres.

€100m plan for Baggot Street

Treasury Holdings is to develop a €100 million office building on Dublin’s Baggot Street. However, work on the project is not expected to begin until 2014 with a completion date set for two years later.

An Bord Pleanála has cleared the way for the eight-storey block which will have a lower ground floor and two basement levels opposite Searson’s bar close to the junction with Waterloo Road. It will have a floor area of 22,222sq m (239,195sq ft), including 460sq m (4,951sq ft) of retail space facing on to Baggot Street. There will be 125 car-parking spaces and 225 bicycle spaces in the basement.

The block has been designed as a naturally ventilated building and is expected to achieve an “A” building energy rating.

Treasury has also secured permission from Dún Laoghaire Rathdown County Council for two additional blocks at its ongoing office development at Central Park in Leopardstown. The seven-storey building is designed around a central atrium and will provide 32,050sq m (345,000sq ft) of additional space.

Costa Coffee for D2 corner

A new Costa Coffee outlet is to open at the junction of Dawson Street and Molesworth Street in Dublin 2. The unit will extend to 221sq m (2,379sq ft). The building was acquired in 2005 by Shelbourne Developments and has 4,200sq m (45,208sq ft) of space, including 800sq m (8,611sq ft) on the ground floor.

Capital growth in Switzerland

Switzerland has become Europe’s first real estate market to produce positive capital growth for 2008, at 1.2 per cent, according to the London researcher IPD.

According to the index, Switzerland has also produced the Continent’s highest nominal total returns for 2008 at 6.1 per cent, a full percentage point down on 2007 but beating the 5.9 per cent return in 2006 – the last of the boom years for the majority of global property markets.