Occupier demand for commercial property in Northern Ireland on the up: report
According to the Royal Institution of Chartered Surveyors (RICS) quarterly report, members reported a rise in occupier demand during quarter one – the first positive finding since quarter two in 2023.
Surveyors were positive about both office space and industrial space – though there was more evidence of rising occupier demand for the latter.
And as a result, the biggest number of surveyors since 2018 said they expected rents to go up.
However, expectations of rising rents were stronger for industrial space than office space.
But demand was less positive in the investor market, with industrial space the only type of property to see an increase in investor demand. Respondents were also cautious when it came to capital value expectations.
But surveyors were more optimistic about capital values going up when taking a 12-month view.
Garrett O'Hare, RICS NI commercial property spokesperson and managing director of Bradley NI, said: 'The commercial property market in Northern Ireland continued to face challenges with a variety of highs and lows depending on the asset class and location.
"The industrial sector continues to outperform the other subsectors, with demand continuing to outweigh supply, albeit demand has eased back somewhat since the influx of occupiers on the back of Brexit.
"It's encouraging to see that retail is showing some signs of improvement with increased occupier demand in high footfall locations, but with rents remaining relatively low.
"The prime office market with larger floor areas remains under pressure, while small spaces and serviced offerings remain attractive due to their flexibility and cost effectiveness.
'Whilst it's promising to see that surveyors are more optimistic on the overall outlook of the commercial property sectors, there are still many obstacles in the way.'
Simon Rubinsohn, RICS chief economist, said performance UK-wide had been steady. 'Despite the turbulence engulfing the geo-political environment following President Trump's tariff announcement at the start of April, feedback to the latest RICS was steady with the headline investment enquiries metric returning to positive territory, albeit modestly, for the first time since the second quarter of 2022.
'Longer term indicators, while generally constructive, continue to reflect the likely headwinds facing the real estate market over the next 12 months. Aside from the challenges linked to the global economy, concerns around domestic issues including the impact of the uplift in NI contributions are seen as likely weighing on occupier demand.
'Meanwhile the bifurcation in the office sector remains very visible in the latest results with the outlook for prime space seemingly improving as sentiment around secondary offices remains deeply negative.'
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