‘Subdued’ market blamed on no-deal Brexit fears

Brian Henning, chair of RICS in Northern Ireland
Brian Henning, chair of RICS in Northern Ireland
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A “subdued” commercial property market in Northern Ireland for Q3 has been blamed on anticipation of a potential no-deal Brexit.

Demand from occupiers has dropped in the Northern Ireland commercial property market during the third quarter of 2019.

An increasingly challenging retail landscape and political uncertainty have also been highlighted following publication of the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey.

Although demand for industrial space continues to increase, the intensity of requirement is easing further after Q2 first saw Brexit-induced manufacturing stockpiling begin to fall back.

Surveyors reported that occupier demand for retail space continued to drop at a “significant rate”.

However, demand for office space continues on an upward trajectory, but at a slower rate than at the beginning of the year.

With the availability of office space increasing according to respondents, the longstanding issue in the Northern Ireland marketplace of not enough supply to meet the demand appears to be easing.

Commenting on the latest Commerical Market Survey, Brian Henning, chair of RICS in Northern Ireland, said: “Overall, the findings reflect a subdued commercial property market in Northern Ireland for Q3.

“This is primarily due to an increasingly challenging environment for the retail sector, but in others may be due to the quarter having seen hesitation due to political uncertainty and anticipation of a potential no-deal Brexit.

“The fact that capital value expectations are still positive suggests a relatively soft landing for the commercial real estate sector is anticipated overall.”

Gary Barr, Relationship Director, Commercial Real Estate, Ulster Bank, said: Some potential occupiers and investors appeared to be taking a wait-and-see approach during Q3 when there was considerable uncertainty in the wider economy.

“Deals are continuing to be done though by a range of buyers for good assets. Retail aside, when the political picture becomes clearer in the new year, occupier and investor demand in the office and industrial sectors may well start to recover.”