Surge in demand for commercial premises

Market activity is encouraging says the RICS Ulster bank report
Market activity is encouraging says the RICS Ulster bank report

Occupier demand for commercial property picked up in the later months of last year according to the latest figutres from the Royal Institute of Chartered Surveyors (RICS) and the Ulster Bank.

The NI Commercial Market Survey for Q4, 2017 indicated rising interest in retail and office premises as the province was one of only two UK regions to do so.

The rent expectations indicator for retail is also positive in the latest survey, bucking the UK trend, whilst the outlook for office and industrial rents also picked up.

On the investment side, interest from potential investors in office and retail property edge upwards after falling in Q3, according to respondents, whilst the data suggests that investor enquiries for industrial premises remained flat.

Expectations for capital values though strengthened across the board (office, retail and industrial) both on short-term horizon (3 months) and looking 12 months ahead.

However, the survey’s indicator for foreign investor interest was negative for the seventh quarter in succession, though only marginally so, suggesting that the number of enquiries from foreign investors continues to decline slowly.

“It appears that overall the Northern Ireland commercial property market ended 2017 much as it had started it, with sustained levels of occupier demand and investor enquiries; albeit that demand softened in the quarters in between,” said RICS NI commercial property spokesperson, Tracy Flannigan, a director at CBRE.

“As we move into 2018, we hope to see expectations for rents and capital values strengthen but political uncertainty remains, and how the year pans out will be influenced by what emerges from the ongoing Brexit negotiations.”

Gary Barr, relationship director for commercial real estate at Ulster Bank said: “Surveyors are reporting rising demand from both occupiers and investors, particularly in the office sector.

“This suggests that the market has picked up following a lull in the mid part of the year, and that it enters 2018 on a relatively firm footing, albeit that there are challenges ahead. At Ulster Bank, we continue to support a wide range of property deals and see firm demand from investors in quality assets.”