Posted on Wednesday 24 April 2019 by John Mulgrew
Demand for retail space in Northern Ireland has fallen for the fifth successive quarter while the office market here has seen a four-year high, it has emerged.
According to the latest RICS (Royal Institution of Chartered Surveyors) and Ulster Bank Commercial Market Survey, a net balance of 64% of respondents pointed to rising tenant demand for office space. Overall, a balance of 22% said occupier demand has increased across the sectors, generally.
However, the volume of retail space has increased, and demand fallen once again, meaning retail availability is at its highest level since the end of 2014.
“In line with this, enquiries from investors about retail opportunities fell according to the balance of respondents, whilst enquiries about office and industrial property were reported to have increased,” the report said.
Brian Henning, chairman of RICS in Northern Ireland, said: “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.”
And Gary Barr, relationship director, commercial real estate, Ulster Bank, said: “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 that we continue to hear about investment and expansion in sectors such as IT and business services.”
Meanwhile, a new report from the British Retaul Consortium says there has been a 2.4% fall in employment within retail, across the UK as a whole.
Aodhán Connolly, director of the Northern Ireland Retail Consortium, said: "Retail is undergoing profound transformation driven by changes in shopping habits, squeezed family finances, fierce competition, and rising costs.
"Public policy is pushing up the cost of employing people in stores – through rises in the national living wage, higher statutory minimum employer pension contributions, and the apprenticeship levy – at the very time that the cost and capability of digital routes to market for retailers has become more affordable and attractive.
"This is upending many retail business models, which can often be painful for the firms and staff involved. What is clear is that the retail industry will look very different in future.”