Retail commercial property sector in the UK’s north struggles
The retail commercial property industry in the UK’s north struggles, shows a new report
The struggling retail industry continues to act as an anchor for growth in the north’s commercial property sector, according to a new report.
The latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey shows that retail demand fell for a fifth successive quarter at the start of 2019.
This is against the backdrop of an overall increase in occupier demand for commercial property, with the sector as a whole performing better than the rest of the UK in the first three months of the year.
The north’s office sector is driving the growth, with a net balance of 64 per cent of surveyors pointing to rising tenant demand – a four-year high. Demand for industrial space was also reported to have risen over the quarter.
It was a different story in retail however, as demand remains firmly in negative territory. This translated into a fifth consecutive month the amount of available retail space has increased – now at its highest level in over four years.
Enquires from investors in relation to retail opportunities also fell, in contrast to the upturn recorded in the office and industrial property sectors.
Looking ahead surveyors are optimistic about the prospects for rents and capital values in the office and industrial sectors over the next three months, while they expect a further decline within retail.
Brian Henning, chair of RICS in Northern Ireland said the retail sector is an area of “real concern”.
The office sector in particular appears to have withstood the most recent test of Brexit uncertainty, with surveyors remaining relatively positive about the sector despite external challenges. In contrast, the struggles of retail continue, with rising availability and the weak outlook for rents a real concern for the sector and for town and city centres across Northern Ireland, he said.
Relationship director of commercial real estate at Ulster Bank, Gary Barr added that the structural changes in retail are well-known and continue apace – and Northern Ireland is no different in this from elsewhere in the UK. The relatively strong performance in Northern Ireland of the office sector is however encouraging and reflects some of the positive announcements about investment and expansion in sectors such as IT and business services.