Outlook 'gloomy' after demand for retail property hits six-year low
Demand from retailers for new shop units here fell in the second quarter of 2018, bringing the sector to a six-year low, according to a report today.
The latest Royal Institution of Chartered Surveyors (RICS) and Ulster Bank Commercial Market Survey said demand from both tenants and investors for retail property continued to fall, leaving a "gloomy" outlook.
The falls puts the sector at its lowest level in over six years, with contributors to the survey predicting a further fall due to the pressures on the high street.
Retail administrations and restructurings through CVAs affecting names like Toys R Us, Maplins, Poundworld and Carpetright have left voids on the high street, adding to woes in a sector already weighed down by the rise of e-commerce.
A net balance of -50% said that occupier demand in the sector fell and investment enquiries saw the biggest drop since December 2011 at -33%.
However, there was a more positive outlook for the industrial and office sectors.
Andy Tough, chairman of RICS in Northern Ireland, said: "It's certainly a challenging time for the retail sector in Northern Ireland, as it is across the UK, with consumer confidence weak and retail footfall under pressure.
"The challenges being faced by the sector, not surprisingly, come through in the latest set of survey results.
"But it's certainly not all bad news in the commercial market, with some bright spots in the industrial and office sectors. Both sectors remain fairly robust in terms of rent expectations and capital value expectations for the next quarter.
"Indications from the survey that the availability of office accommodation is increasing will also provide positive news for many, particularly in relation to efforts to attract further inward investors."
In the office and industrial sectors there were rises in occupier demand, three-month rent expectations, and three-month capital value expectations.
Gary Barr, relationship director commercial real estate at Ulster Bank, said: "Rising demand in the office and, to a lesser extent, the industrial sectors is encouraging. Despite the evident challenges for the retail market we continue to support a wide range of property deals and see firm demand from investors for quality assets."
Last month the home of retailer Eason's on Donegall Place was snapped up by French firm Corum Asset Management for £16.4m, the largest retail investment transaction of 2018 so far.