According to IPD, total returns once again accelerated in Q3 2009 with an all property total return of -6.7% for the quarter, down from -6.1% in Q2. The fall in values for the three months to September was -8.5% while the return from rental income brought up total returns by 1.9%. The cumulative fall in capital values since the peak in September 2007 now stands at -53.0%.
The worst performing market sector was Office, with a total return of -6.8% for the quarter, seeing a fall in market values of -8.7%. Industrials saw a total return of -6.4% and a capital decline of -8.5%, while Retail saw a total return of -6.5% compared to -8.3% in Q2 making it the only sector to see a deceleration in negative returns.
The hardest hit Retail location has been Grafton Street in Dublin where total return for the year to September 2009 was -40.6% compared to -33.9% for All Property. Grafton Street was the lowest yielding of the Retail locations with an equivalent yield of just 2.6% at the peak two years ago, which has now risen to 6.7%. Similarly in Offices, Dublin 4 has been the worst hit with a total return of -36.1% in the year to September 2009. Dublin 4 was the lowest yielding of Office locations at the peak with a yield of just 3.9% which has risen to 7.9% at end September 2009.
Angela Sheahan, Head of Indices at IPD said: "The Q3 results show a mixed picture with the decline in values in Office and Industrial accelerating while Retail appears to have hit the bottom of the curve and started to improve. The year-end results will be very interesting to see if things continue to deteriorate or if we have reached the inflection point."