IT'S all gone quiet on the commercial property market scene as investors kept away from Northern Ireland and activity slowed in the first quarter of this year.
The political impasse and Brexit uncertainty hasn't helped, nor has a spate of administrations (Lagan Construction Group and WIS among them) and workforce reductions at several companies.
But agents CBRE, who have compiled a market overview for the January to March period, insist there are "encouraging signs" for the market, where some sectors are still performing well.
The research points to strong occupier demand, particularly in office and industrial warehouse accommodation.
The office market recorded take-up of more than 270,000 sq ft across 23 reported transactions in the first quarter, which is significant given that in the whole of 2017 there were just 33 transactions and a take-up of 430,300 sq ft.
CBRE director David Wright said: “Interest in quality city centre offices remains robust with a large number of requirements currently in circulation, but there are no new-build schemes due to be completed in 2018, so the market continues to rely on refurbished office stock to meet demand.”
The first quarter also experienced a high level of enquiries into the industrial and warehouse market, but the lack of a devolved government has slowed investors’ decision-making.
The investment market has been relatively quiet with limited deals completing, although the confirmed sale of the Quays in Newry is positive and is underpinned by significant demand from tenants and ongoing local and cross-border trade.
There were mixed outcomes in the retail market, where trading went well for the likes of JD Sports and B&M, but other retailers like Homebase and Next recorded poor results.
The retail warehouse sector continues to trade well, with border locations such as Derry, Newry and Enniskillen benefitting from the continued suppression of sterling.
The hotels market continues to be busy, with the Maldron on Brunswick Street being the first of a number of new hotels to open in Belfast. Development activity has also increased outside the city particularly along the north coast.
Gavin Elliott of CBRE said: “While we have experienced a relatively slow start to the year in the investment market, we expect yields across all sectors will remain stable over the next 12 months.
“Investor activity over the short-to-medium term will continue to be driven by the low cost of debt, investment yield arbitrage to other UK regions, currency effects and a stable underlying occupier market.”
