Recovery lifts Irish commercial proeprty sector

Irish commercial real estate values rose the most since 2006 in the first quarter as the economy improves and international companies seek to lease more space, Investment Property Databank said.

The average value of stores, offices and warehouses across Ireland climbed 5 per cent from the end of last year, London-based IPD said in a statement.

Total return, which combines changes in real estate values and rental income, was 7.2 per cent, the most since the second quarter of 2006.

The Irish economy is recovering from a 2008 property market crash that led to an international bailout.

Consumer confidence rose to a seven-year high this month and the jobless rate has fallen for 21 consecutive months to 11.8 per cent.

Total returns in Ireland in the year to March were 19.4 per cent, the most of any market tracked by IPD.

Offices led other property types with an 8.4 per cent total return.

Industrial properties, little changed over the quarter, were the weakest.

Returns were driven by "increased stability in the Irish economy, considerable demand from both domestic and international investors", Ray Hanley, the chairman of the valuation group at the Society of Chartered Surveyors' Ireland, said in the statement.

He also cited the extension of capital gains tax relief this year and overseas firms "establishing or extending their European bases in Ireland".