by Richard Buckley, Editor, Business Eye

Occupier demand for retail property in Northern Ireland fell in the first quarter of 2018 (Q1 2018) in line with the trend seen across all areas of the UK, according to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey.   However, overall demand for commercial premises in Northern Ireland is still positive, with respondents reporting increases in demand for industrial and office space.


Although retail rent expectations eased for the third quarter in a row, unlike all other areas of the UK they still remain in positive territory for the next quarter. Expectations for increased rent in the industrial and office sectors have also risen.


On the investment side, interest from potential investors rose overall, with the office and industrial sectors faring well, but enquiries in the retail sector fell.


The net balance of respondents reported an increase in overall foreign investment enquiries for the first time in two years although this is coming off a low base. The office and retail sectors saw increased interest from foreign investors, but industrial premises saw a fall.


Expectations for capital values strengthened overall in the short term (3 months) and although retail capital value expectations have fallen for the next quarter, for the 12 months ahead they are positive.


RICS Northern Ireland commercial property spokesperson, Tracy Flannigan, a director at CBRE, said: “Overall the commercial market is presenting a positive picture but despite encouraging figures in the last quarter of 2017, the market for retail property is experiencing difficulties with demand for lettable space at its lowest since 2009. This is exacerbated by the demise of Toys R Us and New Look’s company voluntary arrangement.


“Although short term expectations for capital values in the retail sector have fallen respondents hope to see these pick up later in the next year.”


“The office market remains robust with Grade A office rents maintained at 2017 levels and expectations are for rents to show growth as the supply of Grade A accommodation is taken up.”


Gary Barr, Relationship Director, Commercial Real Estate, Ulster Bank, said: “It is encouraging that surveyors are reporting rising demand overall from both occupiers and investors. There are no doubt challenges ahead for retail but at Ulster Bank we continue to support a wide range of property deals and see firm demand for investors in quality assets.”


The main findings of the survey were:

  • A net balance of 6% of respondents reported overall occupier demand being up in the first quarter of 2018. Office demand was up according to a net balance of 19% respondents and 25% of respondents reported an increase in demand for industrial premises while the retail respondents that demand fell (-25%)
  • The net balance for 3 month rent expectations was 21%, meaning that 21% more of surveyors expect rents to rise rather than fall. 27% of respondents said that they expected office rents to rise.
  • Investment enquiries rose in the office (+27%) and industrial sectors (+7%) but retail enquiries saw a fall (-7%)
  • The net balance for the 3-month capital value expectations was up +13%. Office and industrial expectation rose by (-27%) and (-21%) respectively while retail expectations fell by (-13%). 18% of respondents anticipated a rise in overall capital values in the next year and the net balance of respondents in all sectors including retail were positive about rises.
  • Meanwhile the net balance for foreign investment enquiries (+7%) was in positive territory for the first time in two years and office and retail sectors both saw (+14%) rises in respondents reporting an increase in enquiries. Enquiries for industrial premises were down according to the net balance (-8%) of respondents in that sector.



Ni Manufacturing side

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