THE north's commercial property market has stalled right now, with demand either down or flat for retail, office and industrial premises, a new sectoral barometer shows.
The latest Royal Institution of Chartered Surveyors (Rics) and Ulster Bank commercial market survey reveals that there was an overall 11 per cent dip in occupier demand in the third quarter.
The decline was most marked in retail (down 25 per cent), which was in freefall for the third quarter in a row as online shopping continues to disrupt the market, while office demand declined 7 per cent (its first time in negative territory in almost six years). There was a flat reading for industrial demand.
The problems are compounded with respondents also expecting that retail rents and capital values will be lower again in three months’ time.
In terms of the investment market, the indicator for overall investor enquiries was flat, but there is a divergence between sectors, with investment enquiries for office and industrial premises reported to have increased, whilst respondents indicate a continuing fall in enquiries for retail assets.
When asked about enquiries from foreign investors specifically, the balance of respondents said that the number of these had fallen in the last quarter.
For the first time respondents were asked questions specifically about Brexit. Some 42 per cent in Northern Ireland said that they had seen evidence of firms looking to relocate (the overall UK average was just 25 per cent).
And 62 per cent in the north expect to see an increase in firms relocating over the next two years, compared with 48 per cent in other parts of the UK.
Rics' regional chair Brian Henning said: “On the face of it retail continues to face a really challenging period, not helped in Belfast by the situation created by the fire at Bank Buildings.
"But the picture for the office and industrial sectors continues to be more positive, with surveyors relatively confident about the outlook. However, political and Brexit uncertainty are real concerns which are impacting on pricing.”
Gary Barr, relationship director for commercial real estate at Ulster Bank added: “Despite the challenges faced by retail, the performance of office and industrial sectors is more encouraging, and the outlook for these sectors is relatively positive.
"We continue to support a wide range of property deals and see firm demand from investors for quality assets. Our experience is supported by the survey data which indicates ongoing positive investor demand for office and industrial opportunities.”
