Belfast Telegraph

Retail deals hit by political crisis and Brexit concerns, says report

Uncertainty: Shoppers in Belfast
Uncertainty: Shoppers in Belfast
Margaret Canning

By Margaret Canning

The lack of an Executive and fears over Brexit have hit the rate of retail transactions in Northern Ireland, according to a report.

Colliers International, which has an office in Belfast, said the number of retail property deals had slowed since January, partly as a result of our political stalemate and uncertainty over what happens after EU withdrawal.

During 2017 there had been a number of new openings including lifestyle chain Oliver Bonas, stationery retailer Smiggle and Danish homewares shop Sostrene Grene.

Colliers said that in the last 12 months, around £340m worth of real estate was traded in Northern Ireland and that retail, through 28 transactions, accounted for around 70% of investments.

This month French firm Corum Asset Management acquired 40-46 Donegall Place in Belfast - the home of Eason and Next - for £16.4m.

In its midsummer retail review, Colliers said retail here was transforming rapidly, with problems compounded by the use of Company Voluntary Arrangements (CVAs).

CVAs are mechanisms used by retailers in financial difficulties to help them stay in business by negotiating with their creditors - usually bringing about rental cuts or even store closures.

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Chains including fashion retailer New Look and House of Fraser have availed of CVAs, with the former understood to have negotiated rent reductions on some of its local stores.

And Marks and Spencer has also announced store closures.

But Colliers added that the economy here was still reinforced by a strong public sector, despite a fall in public sector job numbers.

According to the quarterly employment survey from the Northern Ireland Statistics and Research Agency, there are now 9.5% fewer public sector jobs than the series peak nine years ago.

Jonathan Millar, head of Colliers International in Belfast, said: "Since January 2018 there has been limited transactional activity and perhaps further investment will be based on the reformation of the Northern Ireland Executive and signs of certainty following Brexit.

"The public sector is certainly one of the less volatile parts of the economy and is a highly relevant factor when looking at a location's ability to withstand turbulence in the retail market."

Mr Millar also said that while Northern Ireland had escaped M&S and House of Fraser closures, it still faced challenges including the growth of online retail.

But he said out-of-town retail interest was still strong, with new openings by The Range, Home Bargains and EZ Living.

Belfast Telegraph