'Seismic' impact of Covid-19 on commercial property sector prompts calls for less red tape

Occupier demand for commercial property in the north has fallen for the fourth successive quarter. Picture Mark Marlow.
Ryan McAleer

THE seismic impact of coronavirus on the north’s already in decline commercial property sector, has prompted calls for the Executive to help transform the use of buildings to better meet the needs of the 21st century.

Occupier demand for commercial property fell for the fourth successive quarter during January and March, with investment enquiries staying at the lowest levels since 2009.

The findings are published today in the latest quarterly commercial market survey conducted by the Royal Institution of Chartered Surveyors (RICS) and Ulster Bank.

RICS has responded to the sharp deterioration in market sentiment by urging the Executive to re-examine commercial property use classes to create more flexibility and prevent them being “stuck” for a definitive use.

Pointing to the particular impact of the Covid-19 lockdown on the retail sector, RICS has suggested that switching between uses of commercial buildings on high streets could be made simpler with less red tape.

Brian Henning, who chairs the body in the north, said: “The seismic nature of what is currently taking place in the commercial property sector should not be underestimated.

“Structural changes already underway particularly around ecommerce will be exacerbated, hitting the high street hard.

“But alongside this, the inevitable rise in agile working as businesses seek to build resilience against future pandemics will undoubtedly lead to a reassessment of demand for office space.”

The steady fall in occupier demand has naturally resulted in an upsurge in the availability of commercial property.

Mr Henning that it is critical for government to engage with the industry to facilitate the transformation of the commercial property estate to something that better reflects the needs of a twenty-first century economy and that can address the shortfall of good quality housing.

“In the light of current events, there is even more of a need to rethink commercial property use-class regulation, which was produced in response to more static conditions, and make the case for greater flexibility.”

Enjoy reading the Irish News?

Subscribe now to get full access