Brexit fears are holding back the commercial property market in Northern Ireland with fewer overseas investors prepared to spend money here, according to a survey today.
The Royal Institution of Chartered Surveyors (RICS) and Ulster Bank research found that occupier and investor demand for commercial property here had fallen between April and June.
And surveyors also told the professional body that they had lowered their expectations for rents and capital values.
The downwards shift in sentiment comes despite an upsurge in building in Belfast, including the construction of a number of new hotels.
The new venues include Hastings Hotels’ Grand Central at Bedford Street, Dalata plc’s nearby Maldron Hotel, and the Marriott AC at Belfast Harbour’s City Quays.
In total, more than 20 hotels are planned for the city.
RICS members said that uncertainty regarding EU withdrawal negotiations and the inconclusive result of the recent general election were combining to form impediments to the market.
Of all UK regions, Brexit was having the biggest impact on outlook in Northern Ireland, where demand from foreign investors for assets was down for the fifth quarter in a row.
And professionals in the province were the most likely to report that they’d seen evidence of businesses wanting to relocate away from the UK.
Just 17% of respondents reported that occupier demand was up in the second quarter, compared to 27% in the first quarter.
And 10% more surveyors expected rents to rise than fall – down from 38% in quarter one.
Only 4% of respondents reported a rise in investment enquiries, down from 18% over the first three months of the year.
And reports of enquiries from foreign investors were down for the fifth quarter in a row.
Tracy Flannigan, a director at Colliers International and RICS commercial property spokeswoman, said most indicators were in positive territory.
But she said there were a range of political factors at play, including Northern Ireland’s lack of devolved government.
She added: “RICS believes that a local Executive would be best placed to ensure the delivery of long-term policies and decision-making that are vital to the development and growth of the economy, including the land, property and construction sectors.”
Gary Barr, relationship director of commercial real estate at Ulster Bank, said: “The survey’s data is in line with other economic indicators for the Northern Ireland economy in the second quarter of the year, which suggest a more cautious approach by businesses and consumers.
“However, while sentiment has eased back, the survey points to ongoing activity in the market, and Ulster Bank is committed to continuing to support good deals and investments.”
Separate research this week described Belfast as “one of the world’s fastest-growing cities in the world” for prime retail space.
CBRE’s half-yearly report, Global Prime Retail Rents, listed Belfast as the eighth fastest-growing location. It recorded an 8.7% year-on-year increase in rents for prime retail in the first quarter of 2017.
But Belfast was beaten in the rankings by its rivals Dublin and London.
The city has seen significant regeneration of key retail locations, such as Donegall Place, Arthur Street and Ann Street.