The 'long goodbye' may take its toll on property
The world of property is as vulnerable to the concerns of Brexit as any other industry. However the impact of "the long goodbye" - as one political analyst recently dubbed the whole convoluted process - could have serious implications for Northern Ireland's property and construction industries.
Add to that the lack of agreement to re-establish a governing Assembly at Stormont for over two years now and we potentially have a perfect storm of conditions to cause a 'slow down' in some key property sectors in 2019.
The latest RICS and Ulster Bank Residential Market Survey indicates that while house sales and prices held up well in 2018, consistently outperforming the rest of the UK in terms of growth, there is an increasing concern that the first quarter of 2019 will be more challenging.
Elsewhere we have a generally difficult retail property market, with seemingly regular store closures and capital values still flat at best, anticipating the next big brand or department store demise due primarily to the exponential growth of online retailing.
This is significant, as shopping centres are generally anchored by big brands or department stores, thus undermining the investment structure of these assets. A bright spot in this sector, however, is the re-opening of Primark in Belfast after the huge fire at Bank Buildings.
The other encouraging event is the re-emergence of The Boulevard (re-named from The Outlet) at Banbridge as a major shopping destination. This follows a significant investment in adding a cinema, condensing the retail offer and adding some new openings of market-leading brands - and the true indicator of success a substantial increase in footfall in the latter part of 2018. This model of improving the customer experience by adding a leisure element is the future of retailing in shopping centres.
The hotel sector has been undergoing something of a transformation in Belfast with a number of high profile developments improving the availability of rooms offering a more diverse choice for visitors. As expected, so many new beds coming on to the market in such a relatively short space of time has resulted in occupancy dropping below 80% for the first time in many years.
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The student accommodation sector is relatively new to Belfast but proves the theory that substantial infrastructure investment (in this case by Ulster University) is a catalyst for associated property investment.
And the office sector has also seen substantial investment over the past few years with the most recent development at Bedford Square attracting Deloitte. Rental levels for Grade A offices have now reached a level over £20/sq ft in Belfast which means investment in good quality space is now commercially viable for the first time in many years.
There is no doubt that if a Brexit deal can be reached where Northern Ireland could benefit from unrestricted access to both the EU and GB markets, the office and industrial sectors particularly would be in a strong position to become a much more attractive proposition for new investment.
The knock-on effect in other property sectors would be significant, providing substantial new investment in a region that needs it.