Demand for commercial property in the north continued to fall in first quarter - survey

Industry professionals pessimistic around capital value of office assets

Belfast Agenda
A new survey among property industry professionals by RICS suggests demand for office and retail space continued to fall in the first quarter of 2024. (Ballygally View Images/Getty Images/iStockphoto)

Demand for commercial property in Northern Ireland continued to fall in the first three months of 2024, a new survey suggests.

The latest snapshot of sentiment among industry professionals from the Royal Institution of Chartered Surveyors (RICS) found occupier demand for offices and retail space fell again in the first quarter (Q1) of the year.

Occupier demand for industrial space was also flat in Q1 2024, following 15 successive quarters of growth.

On the investment side, the survey reported a fall in investor enquiries for commercial property, making it the third successive quarter of declining interest.

The slump was most significant in the office and retail sectors.

But the survey suggests investors still see value in Northern Ireland’s industrial space.

Property industry professionals were most pessimistic when it came to the value of commercial assets.

A net balance of -45% of Northern Ireland respondents anticipate that capital values for office space will fall over the next three months.

The picture looks much better on the industrial side.

RICS NI spokesperson Garrett O’Hare said the survey followed a turbulent 2023.

“It’s unsurprising that surveyors remain cautious on the outlook of the commercial property market,” he said.

“The commercial property sector is continuing to face challenges such as continuing to navigate working from home patterns and changes in shopping habits.

“With demand from investors and occupiers falling overall, surveyors continue to anticipate that capital values and rents will come under pressure, on top of the increased finance and build costs that new developments are facing.

“However, it is encouraging to note the continuing strong expectations for the industrial sector.”