Belfast Telegraph

Commercial property market hurt by political uncertainty, says report

By Margaret Canning

Retail lettings are at a healthy level across Northern Ireland despite a survey suggesting that political uncertainty has helped lead to a fall in demand, it has been claimed.

A study by the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank published today said demand for retail space fell during the third quarter, but demand was office space was up.

However, the report - which follows more positive assessments of the market - also found that demand from occupiers of industrial space had been flat during the third quarter.

A spokesman for the RICS said: "Political uncertainty, including the ongoing Brexit negotiations, continues to be seen by surveyors as an impediment to market activity.

"In relation to the investment market, respondents have indicated that reduced supply of assets for sale is also an issue."

The volume of inquiries from potential investors also fell back in the three months to October, with a further decline in inquiries from foreign investors.

Tracy Flannigan, a director at commercial property agents Colliers International and a spokeswoman for RICS, said: "There are some brighter spots, but overall the Northern Ireland commercial property market remains subdued and the indications are that this won't change dramatically in the near-term.

"On the investment side, there have been a small number of transactions in the retail sector, but overall demand from investors is constrained. With continuing political uncertainty, this is perhaps unsurprising."

But surveyor Eamonn Murphy said the retail lettings market was active, including a spate of fresh lettings at Ballymena's Fairhill Shopping Centre, including bakery chain Greggs and fashion retailer Superdry.

In Belfast, meanwhile, outdoors shop Trespass doubled its store size in a move from Arthur Street to Ann Street, and Giftware retailer Oliver Bonas is set to open on Arthur Street.

But Mr Murphy said further deals in the city were being hampered by a lack of available space, echoing the findings of research by estate agents Lisney.

Andrew Webb, economist and chairman of Belfast City Centre Management, said retail in the city was being "buffeted" by additional spending driven by the weaker pound.

"I see footfall remaining strong across and am seeing new openings and expansions coming on stream - for example Trespass or Oliver Bonas," he added.

This week, research by commercial property agents Lisney said there had been 91,557 sq ft of office space taken up during the quarter.

But the firm also warned the supply of units in prime retail locations was drying up.

It said the value of significant commercial property sales in the quarter was just under £200m, with the biggest deal in the period the sale of CastleCourt Shopping Centre to Wirefox for £125m. Major properties still on the market include Longwood Retail Park in Newtownabbey, at £47.8m.

There are fears that the retail sector may be being hit by a slowdown in consumer spending. Yesterday, the Australian owner of DIY chain Homebase - which has eight stores in Northern Ireland - said it had seen sales plummet during the first quarter.

Bunnings, which snapped up Homebase last year, posted an 11.9% slide in like-for-like sales in the first three months of the year, while total sales crashed 13.8% to £276m.

The figures came alongside a slowing UK housing market following the Brexit vote and after B&Q also posted falling sales.

Belfast Telegraph

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