Foreign interest in NI commercial property declining, says survey

INTEREST from foreign investors in Northern Ireland commercial property has been in decline for nearly two years, according to a survey today.

But the Royal Institution of Chartered Surveyors (RICS) report for the final quarter of last year said interest from would-be occupiers did increase.

The increase was driven by the retail and office markets — with the province the only UK region to report growth in retail occupier demand in the quarter.

However, the report said the growth in retail occupier demand followed a fall in interest over the previous three-month period.

Interest from potential investors in office and retail properties rose slightly after falling in the third quarter, although investor enquiries for industri- al premises was steady. And it found interest from foreign investors was negative for the seventh quarter — though only marginally.

Tracy Flannigan, a director at CBRE and RICS NI commercial property spokesman, said: “It appears that overall the Northern Ireland commercial property market ended 2017 much as it had started it, with sustained levels of occupier demand and investor enquiries; albeit that demand softened in the quarters in between.

“As we move into 2018, we hope to see expectations for rents and capital values strengthen, but political uncertainty remains, and how the year pans out will be influenced by what emerges from the ongoing Brexit negotiations.”

Gary Barr, relationship director, for commercial real estate at Ulster Bank, said: “Surveyors are reporting rising demand from both occupiers and investors, particularly in the office sector.

“This suggests that the market has picked up following a lull in the middle part of the year, and that it enters 2018 on a relatively firm footing, albeit that there are challenges ahead.”

Meanwhile, a separate report by Lambert Smith Hampton (LSH) said the £123m sale of CastleCourt Shopping Centre in Belfast to Wirefox was a major boost to the market last year.

But Neil McShane, director in the capital markets division at LSH, said there was a mixed picture between the sectors during the year as a whole: “The retail sector was considerably boosted by one deal and the office performance was consistent with 2016.

“On the other hand, the industrial and alternative sectors are growing steadily.”

Other notable retail deals included the £27.7m sale of Tesco Extra in Newry.