| LONDON, March 1
LONDON, March 1 Rents for the best Dublin
offices have risen for the first time since the financial crisis
caused a property crash in Ireland that cut some commercial real
estate values by more than half, the latest data from property
consulant CBRE shows.
Calculated every two months and based on recent transaction
data, rents have increased to 28.50 euros ($37.40) per square
foot from 27.50 in January, driven by demand from tenants like
Facebook, Ebay and Google that are
attracted to the country's low corporation tax rate of 12.5
At the same time yields on so-called prime offices have
fallen to 6.5 percent, the lowest since they were 5.5 percent
before the collapse of Lehman Brothers in the third quarter of
2008, as overseas investors competed for the best real estate in
a bet that the country has put the worst of its economic
problems behind it.
At the last peak of the market in the middle of 2007 prime
office rents were 62.50 euros per square foot before falling to
27.50 euros last year and yields were 3.75 percent before
hitting a peak of 7.5 percent in 2008, CBRE said.
"It is a top slither of the market but it's another
indicator showing economic improvement in Ireland," said Marie
Hunt an executive director at CBRE in Ireland. "Office rents
should hit 30 euros per square foot by the middle of this year."
Ebay said this month it would hire 450 people in Ireland
almost a year after handing the bailed-out country its biggest
post-crisis job boost by hiring 1,000 new workers at its payment
Overseas investor interest has come from North American
investors and RREEF, the property arm of Deutsche Bank
, JP Morgan Asset Management and the real
estate arm of French insurer Axa all told Reuters they
have looked at buying in Ireland.
Overseas interest is also picking up as the country's banks,
including the National Asset Management Agency 'bad bank' ramp
up loan sales backed by real estate.
European Commission president Jose Manuel Barroso said on
Thursday that tough fiscal decisions meant Ireland was "turning
the corner" though patchy economic data that includes falling
retail sales points to a slow and uneven recovery.
Outside the best Dublin locations, office rents are
flat-lining amid a vacancy rate of about 20 percent, a trend
mirrored in the country's housing market. House prices fell 0.6
percent month-on-month across Ireland in January though they
rose 0.5 in Dublin.