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Press release

27 JUL 2017

Political uncertainty hitting NI commercial property market

Political uncertainty appears to be impacting on sentiment in Northern Ireland’s commercial property market, according to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey.

Occupier and investor demand both softened in the second quarter of the year, according to feedback received from Northern Ireland commercial property professionals. Expectations for both rents and capital values were also trimmed, the survey findings show.

This follows the UK trend, where rental expectations have been scaled back and capital value expectations have moderated.

Political uncertainty  including the ongoing Brexit negotiations and the recent UK general election  is seen by surveyors as an impediment to market activity.

The UK’s decision to leave the EU continues to impact on investment decisions in Northern Ireland in particular. The survey suggests that demand from foreign investors for Northern Ireland commercial property assets has fallen for the fifth quarter in succession.

Northern Ireland surveyors are also more likely than respondents in other parts of the UK to say that they have seen evidence of businesses looking to relocate away from the UK as a result of Brexit. Northern Ireland, Scotland and London continue to return more than 50% of respondents expressing this view.

Main findings

  • A net balance of 17% of respondents reported occupier demand (all sectors) being up in the first quarter. (This eased from 27% in Q1.)
  • The balance of respondents (+13%) indicated that availability of commercial property space (all sectors) rose.
  • The net balance for 3month rent expectations was 10%, meaning that 10% more surveyors expect rents to rise than fall. (This was down from 38% in Q1.)
  • Investment enquires were more or less flat with a net balance of only 4% of respondents seeing a rise. (This had eased back from +18% the previous three months.)
  • The net balance for 3month capital value expectations was +15% (down from +33% in Q1).
  • Meanwhile, the net balance for foreign investment enquires (-29%) was in negative territory for the fifth quarter in succession.