Demand for retail property in NI plunges to six-year low
DEMAND for property in the beleaguered retail sector has fallen to its lowest level in over six years, according to new research.
The latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey has revealed that interest from both tenants and investors for retail property in Northern Ireland continued to fall in the second quarter of the year, with sentiment now at its lowest since March 2012. Half of those surveyed said occupier demand in the sector fell, while investment enquiries saw the biggest drop since December 2011 - a net balance of -33 per cent.
The disappointing figures come at a time when the UK retail sector is struggling with big names Toys R Us and Maplin closing their doors in recent months, while earlier this week Poundworld announced the closure of two local stores at Belfast and Newtownards as part of its latest cull, at a cost of 33 jobs.
Better news was seen in the office and industrial sectors, with both recording rises in occupier demand, three-month rent expectations and three-month capital value expectations.
Enquiries from both UK and foreign investors were down at an all-sector level, however, the picture regarding investment enquiries was less downbeat for industrial and office property than it was for retail.
Chair of RICS in Northern Ireland, Andy Tough said it is a challenging time for the retail sector in the north, with consumer confidence weak and retail footfall under pressure.
"The challenges being faced by the sector, not surprisingly, come through in the latest set of survey results," he said.
"But it's certainly not all bad news in the commercial market, with some bright spots in the industrial and office sectors. Both sectors remain fairly robust in terms of rent expectations and capital value expectations for the next quarter. Indications from the survey that the availability of office accommodation is increasing will also provide positive news for many, particularly in relation to efforts to attract further inward investors.”
Gary Barr, relationship director commercial real estate at Ulster Bank, added:
“Rising demand in the office and, to a lesser extent, the industrial sectors is encouraging. Despite the evident challenges for the retail market we continue to support a wide range of property deals and see firm demand from investors for quality assets.”