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Decline of Northern Ireland retail property sector ongoing as demand falls

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Subdued market: Brian Henning

Subdued market: Brian Henning

Subdued market: Brian Henning

The decline of the retail sector in Northern Ireland is continuing even as other parts of the commercial property market anticipate a bounce from the Executive's return, a survey said today.

Surveyors' outlook for the retail sector is at its lowest in five years, according to the report by the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank.

Demand from retailers dropped in the last quarter, as well as demand from office occupiers and investors.

However, surveyors said they were more upbeat about the future for the offices and industrial sector following the restoration of the Executive this month and the decisive general election result in December.

RICS said rents and capital values were expected to rise in the office and industrial sector during 2020, but there was a "big divergence" between those sectors and retail, where a slump was likely to continue.

Surveyors expect rents and capital values in Northern Ireland to rise overall in the 12 months ahead, however, there is a big divergence between the office and industrial sectors on the one hand and retail on the other.

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A number of surveyors expect rents to increase over the next year, with even more expecting growth in industrial rents.

However, the outlook for the retail sector was at its gloomiest in five years.

Overall, aside from retail, the outlook for the year ahead was strong after a challenging end to 2019.

And it was hoped that greater political clarity might spur on some pent-up activity.

Brian Henning, chair of RICS in Northern Ireland, said: "Overall, the findings reflect a subdued commercial property market in Northern Ireland during the fourth quarter of 2019, with uncertainty impacting on activity by occupiers and investors.

"Activity was more muted in Q4 across the office and industrial and retail was reported to be continuing to see demand decline."

Mr Henning said pent-up demand in the market was likely to be realised this year, but added: "It should be remembered that there is still much to be negotiated in relation to Brexit and uncertainty on that front is not done."

Gary Barr, relationship director in commercial real estate at Ulster Bank, said: "Some potential occupiers and investors were certainly taking a bit of a wait and see approach towards the end of last year when there was considerable uncertainty in the wider economy.

"But deals continued to be done by a range of buyers for good assets.

"Retail aside perhaps, it would not be surprising to see activity that had been put on hold starting to come through now that there is some more political certainty in Northern Ireland."

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