Belfast Telegraph

Lack of new buildings 'may be barrier to big investors'

By Clare Weir

A lack of office and retail construction could mean Northern Ireland is unable to accommodate large foreign direct investors, a report has claimed.

The report said that rent prices for premium office space is comparable to 20 years ago and suggests Government occupancy of prime Belfast office space continues to artificially depress rents and discourage construction of new offices.

Commercial property agency Lisney scrutinised the retail market in 17 towns and cities, the office market in Belfast city centre and the industrial property market in large industrial zones.

In Belfast, the report said that rents for Grade A office space are now around £12 per sq ft, which is comparable to 20 years ago.

While there is a significant amount of supply, there is little development taking place, which could lead to a shortage of space to cater for future inward investment demand, particularly in the event of a lowering in the rate of corporation tax.

In the retail sector, while rents are down 30% to 50%, business rates remain the same and the report has called for a reduction.

Vacancy levels were highest in Portadown (20%) and lowest in Craigavon (3.6%).

In the industrial sector, including Mallusk, Dargan, Duncrue and Newry, vacancy levels in Newry are lowest (6%) and are highest in Mallusk (21%).

The research shows a shortage of good quality space and buildings over 10,000 sq ft and signs of a future lack of purpose-built space to meet demand.

Lisney managing director Declan Flynn said that the Republic remains a significant competitor in terms of securing major occupiers for office and industrial space.

He said: "Our town and city centres have already been impacted badly by the downturn in the economy and competition from out-of-town shopping, online retailing and supermarkets. We need effective policies to protect our town centres and these should include rates reductions for all to locate in town centres rather than out of town."

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