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Surveyors reveal drop in demand for Northern Ireland property after Brexit

By John Mulgrew

Published 21/07/2016

The Brexit vote has affected confidence in the commercial property sector in Belfast, say surveyors.
The Brexit vote has affected confidence in the commercial property sector in Belfast, say surveyors.

Brexit has led to a drop in confidence and investor demand for commercial property in Northern Ireland, a new survey has revealed.

The vote to leave the EU and the "political and economic uncertainty" has "clearly dampened sentiment" in the Northern Ireland commercial property market, a Royal Institution of Chartered Surveyors (Rics) survey said today.

It was carried out this month and in June following the result of the EU referendum. Those questioned said a strong rise in investment inquiries at the start of the year was reversed in the second quarter, falling by 5%.

Surveyors are asked a series of questions about the property market, and whether they believe areas such as demand have improved or weakened.

It says foreign investor demand also declined from a plus 24% positive swing to minus 15% in the period following the vote.

Ben Collins, Rics Northern Ireland director, said that the "political and economic uncertainty in the aftermath of the referendum result has clearly dampened sentiment in the commercial property market in Northern Ireland, as it has across the UK".

"Whether or not the deterioration in the data is a knee-jerk reaction that will unwind as the result is digested, rather than the start of a more prolonged downturn, remains to be seen," he said.

Following the Brexit vote, it was reported one developer had shelved plans to build a large office building in Belfast city centre.

And the Belfast Telegraph revealed that the sale of the Sirocco site in east Belfast, which is due to be developed in a £300m project, was under threat due to Brexit, and a government conservation order.

Eamonn Murphy of Murphy Chartered Surveyors said: "The reality is that post-Brexit, people say, 'I don't think I should be selling this'.

"I think, when you speak to people, there is a knee-jerk reaction - but the market needs to move forward." He added a lot of development had still to "get off the ground".

And Gavin Weir, director of GVA NI, said while the impact of the decision to leave the EU could hit short-term demand "it's too early to say what impact this will have" longer-term.

He said: "The potential for the decrease in demand is undoubtedly there. But where they end up in this is not clear - they may come out the other side."

He said reports of deals being put off may be premature. "You don't make your mind up in two weeks - it's not done and dusted. We don't know what the terms will look like (after leaving)."

Rics head of UK policy, Jeremy Blackburn, said the survey shows the "impact" uncertainty is having on investment in the sector.

Belfast Telegraph

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