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Uncertainty prevails as EU vote looms, but investment in Northern Ireland office space still growing

By John Mulgrew

The commercial property market in Northern Ireland is proving resilient amid the headwind of uncertainty leading up to the EU referendum, a new report has said.

But two-thirds of those quizzed say a Brexit would have a negative impact on commercial property here, according to figures from the Royal Institution of Chartered Surveyors (RICS).

Just 9% of respondents in Northern Ireland believe a vote to leave the UK would have a positive impact here.

But overall, investment in both new retail and office space continued to grow in the first quarter of the year.

However, it was at a slower rate than the end of 2015.

Just one in four Northern Ireland commercial market surveyors said uncertainty in the run-up to the June 23 vote was leading to reduced investment.

That contrasts sharply with elsewhere in the UK, with 80% of those in central London saying investment was being impacted.

"The commercial property sector in Northern Ireland has been relatively strong, with good occupier and investor demand in the office and retail sectors for quality product," said RICS commercial property spokeswoman Tracy Flannigan.

According to the latest figures, office availability fell in the first quarter of the year.

"However, availability in the retail sector remains less of an issue. On the whole, the market remained in recovery mode."

Northern Ireland, and in particular Belfast, has had a resurgence of property development in the last few months.

Belfast Harbour's City Quays development reached full occupancy this month, while work is starting on the City Quays 2 sister development.

And Marriott will take on the new City Quays hotel project in Belfast with its AC Hotels brand.

There are also more than 20 hotel developments in the works.

One of the those is the four-star, 200-bedroom Grand Central Hotel, which will transform the 23-storey Windsor House in Belfast city centre.

Meanwhile, across the UK, 43% of those questioned felt a Brexit would have a negative impact on the commercial property sector, while only 6% said it would be a boost.

The latest paper from RICS on a Brexit shows there has been a steady easing in international demand for office, industrial and retail property in the UK, since the referendum was confirmed a year ago.

"There is no doubt that since the EU referendum became a certainty following the General Election last May, we have seen a decline in interest from overseas investors in UK commercial property," RICS chief economist, Simon Rubinsohn, said.

"At least in the short-term, we know that international retailers and service providers are finding the UK market less attractive.

"But we need not view this as a negative. As a result of the market dampening, business rents are also rising at much slower rates, which suggests that we might soon be seeing more favourable conditions for entry and business growth."

Speaking about the impact ton farmers, RICS rural chairman Gerard Smith said: "In the event of Brexit, farmers will most likely lose access to the EU single market and CAP.

"The question that Government has yet to answer is how much of the current support system they would replace in such an event."

Belfast Telegraph