Overseas interest in property down though home market healthy: RICS
Northern Ireland is continuing to see a decline in overseas interest in commerical property, according to an industry survey.
And surveyors here were the most likely — after London — to say they had seen evidence of firms looking to relocate from the UK as a result of the Brexit vote.
But the Royal Institution of Chartered Surveyors (RICS) said occupier demand was up for retail, office and industrial space during the last quarter of 2016.
However, there was less property availabile — which RICS said heralded a likely increase in rents.
And a fall in the value of sterling had attracted more shoppers from the Republic to Northern Ireland’s shops in the aftermath of the EU referendum, which had contributed to the pick-up in retail.
Enquiries from potential investors also picked up in the quarter, particularly for retail and office units, but enquiries from overseas had waned for the third quarter in a row, though at a gentler pace than before.
Tracy Flannigan, a director at commercial property agents Colliers International, said: “In terms of occupier demand and rent expectations, the Northern Ireland commercial property market ended 2016 much as it started, with good demand evident, particularly in the retail and office sectors.
“However, the middle part of the year saw sentiment impacted by the result of the EU referendum.
“As we move into 2017, key issues for the market remain the lack of availability of space, particularly grade A office accommodation, as well as some uncertainty on the horizon in relation to Brexit.
“However, for now, rental and capital value expectations remain firm.”
Gary Barr, relationship director for real estate at Ulster Bank, said: “There is no doubt that the build-up to the EU referendum led some in the real estate sector to pause for thought ahead of June 23, and the UK market as a whole experienced something of a fall in sentiment in the immediate aftermath of the Brexit announcement.
“But, with the economy performing better than expected, consumer confidence holding up, and the exchange rate bringing shoppers up from the south, an uptick in property market confidence is perhaps unsurprising.”
Mr Barr said the bank had funded a number of commercial property retail deals during the year, including the £30m sale of Damolly Retail Park in Newry to MJM Group.
In a separate report, commercial property agents CBRE said Brexit contributed to a 40% slump in investment deals in Northern Ireland from £400m to £248m during 2016.