A WEAK retail sector is dragging down an otherwise strong commercial property market in the north, according to a new report.
The latest RICS and Ulster Bank Commercial Market Survey, covering the last three months of 2018, shows
a decline in demand for retail space, largely driven by changing shopping habits.
The figures further reveal that enquiries for retail property have fallen for the fourth consecutive quarter.
The outlook for the industry is no brighter, with an expectation retail rents will continue to fall over the next three months.
The retail performance is in direct contrast to the overall picture, with the north one of only a small number of UK regions to report an increase in occupier demand (10 per cent of respondents)
Investment enquiries are also reported to have picked up for the first time in nine months.
The encouraging figures were boosted by the industrial and office sectors,which both reported an increase in demand, the former from a net balance of 26 per cent of respondents and the latter, 48 per cent.
The rental outlook is also positive for the next three months, particularly within the office sector, while
enquiries regarding office and industrial assets are on the increase.
RICS Northern Ireland chairman, Brian Henning said the retail figures mar an otherwise positive market performance.
“Changes in the preferences and behaviours of consumers are resulting in a continually challenging landscape for the retail sector," Mr Henning said.
"On the other hand, sentiment amongst surveyors remains relatively positive in the industrial and office sectors, which is encouraging in the face of uncertainty. Retail aside, expectations for the market are also relatively upbeat considering the landscape.”
Gary Barr, relationship director for commercial real estate at Ulster Bank added:
“The downturn in high street retail has been most keenly felt in our secondary centres. Investor demand for office and industrial has remained robust and prime assets in Belfast city centre are most in demand.”
