Demand rebounds but investment interest falls

Tracy Flannigan
Tracy Flannigan

Occupier demand for commercial property in Northern Ireland rebounded strongly in the final quarter of 2016, but enquiries from foreign investors continued to decline for the third quarter in a row according to the latest data from the Royal Institution of Chartered Surveyors.

The RICS Ulster Bank Commercial Market survey for Q4 suggests demand, for retail, office and industrial space was up according to the balance of chartered surveyors, following a significant softening in demand in Q3.

On the other hand, availability has fallen in all categories, according to respondents. As a result, respondents said they expected rents to rise through the first quarter of 2017.

Enquiries from potential investors also picked up in the quarter, particularly for retail and office units, and capital value expectations remain firm, despite a tailing off of interest from outside the province.

“In terms of occupier demand and rent expectations, the Northern Ireland commercial property market ended 2016 much as it started, with good demand evident – particularly in the retail and office sectors, said NI commercial property spokesperson, Tracy Flannigan, a director at Colliers International.

“However, the middle part of the year saw sentiment impacted by the EU Referendum vote.

“As we move into 2017, key issues for the market remain the lack of availability of space, particularly grade A office accommodation, as well as some uncertainty on the horizon in relation to Brexit.

“However, for now, rental and capital value expectations remain firm.”