'Some clear signs of hesitation': Northern Ireland commercial property market shows signs of caution as office demand falls further

Occupier demand for commercial property in Northern Ireland remained subdued in the second quarter of 2026, with growing uncertainty continuing to weigh on parts of the market, according to the latest RICS Commercial Property Monitor.

The quarterly survey found that overall occupier demand was broadly flat during Q2, with the office sector experiencing the sharpest decline. A net balance of -29% of Northern Ireland respondents reported a fall in demand for office space, a further deterioration from the -10% recorded in the first quarter.

Demand for industrial property also weakened, falling flat during the quarter and reaching its lowest level in two years, with surveyors pointing to wider economic and geopolitical pressures impacting confidence.

However, the retail sector provided a more positive picture, with a net balance of 29% of respondents reporting an increase in occupier demand. This marked the first time the measure has entered positive territory since 2022.

Despite the mixed picture across sectors, rental expectations remain modestly positive overall, with a net balance of 10% of respondents expecting rents to increase during the third quarter of 2026.

The outlook differs significantly between sectors, however. Office rental expectations remained negative, with a net balance of -29% anticipating falls over the next three months. In contrast, the industrial sector continues to show stronger rental prospects, with a net balance of 57% expecting rents to rise, although this was down from the previous quarter.

Retail rents are expected to remain unchanged for the third consecutive quarter.

Investment activity also remained subdued, with enquiries reported as flat across the commercial property market during the second quarter.

Despite the cautious sentiment, expectations for capital values improved slightly. A net balance of 20% of respondents expect capital values to increase in the third quarter of 2026, up from 13% in Q1.

Garrett O’Hare, RICS Northern Ireland commercial property spokesperson, said the market remained stable overall but warned that signs of caution were emerging.

“The second quarter of 2026 was relatively steady in the Northern Ireland commercial property market, but there are some clear signs of hesitation,” he said.

“Northern Ireland’s retail market saw some pick up in recent months, and anecdotally we’re seeing well-positioned retail units performing well, which is encouraging for the industry.

“In the industrial sector, we can perhaps see an impact from global uncertainty with a flat picture in the quarter. Looking ahead, while there are some signs of optimism, I would expect some caution to be evident in the short term.”