Belfast Telegraph

Falling demand for retail space fuels commercial property slump

Subdued picture: Brian Henning
Subdued picture: Brian Henning
Margaret Canning

By Margaret Canning

Demand for commercial property in Northern Ireland was down in the second quarter as the difficulties facing the retail sector continued, according to a major survey today.

And political and economic uncertainty was also a factor in falling demand from potential occupiers, the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank report said.

There had been less pressure on industrial space during the quarter, as previous demand for room to stockpile goods in advance of the March 29 Brexit deadline eased off.

There was also an easing-off in demand for office space, RICS said, although growth in the sector continued.

And demand for retail space had also fallen markedly - continuing a decline over the last year-and-a-half.

There was also a slowdown in demand from commercial property investors, with interest falling in retail space in particular.

Brian Henning, chairman of RICS in Northern Ireland, said: "Overall, the findings point to a more subdued picture for the commercial property market in Northern Ireland in quarter two than in quarter one, but this is primarily driven by the retail sector, with a picture brighter for the office and industrial sectors. However, they too are less positive than they were, and whilst there are some sector-specific factors at play, it appears that the uncertainty politically and economically is being felt."

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And Gary Barr, relationship director for commercial real estate at Ulster Bank, said: "As we pass the halfway mark in 2019, overall it appears to have been a relatively positive six months in the office and industrial sectors, with good demand from occupiers, particularly in the early part of the year.

"In the investment market, some potential investors may be taking a wait and see approach, but deals continue to be done by a range of buyers for good assets."

A separate report earlier this week by agency Lambert Smith Hampton said there had been a pick-up in investment deals in the second quarter.

Citibank's purchase of its Gateway Office base in Belfast's Titanic Quarter for £34m in April dominated the second quarter transactions, bringing the total to £61.7m.

But commercial property agent Lambert Smith Hampton warned that political uncertainty from the risk of a no-deal Brexit and the lack of an Assembly were still putting off buyers and sellers.

Other major deals included the £12.5m acquisition of Antrim Business Park and a £5.3m deal for the Timber Quay offices on Strand Road in Londonderry.

Belfast Telegraph