Demand For Commercial Property In Northern Ireland On The Up
Overall occupier demand for commercial property in Northern Ireland rose at the fastest rate seen in three years according to the Q2 2025 Royal Institution of Chartered Surveyors (RICS) Commercial Property Monitor, bolstered by the industrial sector.
A net balance of 10% of NI respondents reported a rise in overall occupier demand, which is the highest this balance has been since 2022, and up from 6% seen in Q1. Looking at the subsectors though reveals that this unturn is being largely driven by demand for industrial space. A net balance of 40% of respondents said that demand for this subsector increased in the quarter, meanwhile demand for office space was reported to have been flat and retail experienced a fall (a net balance of -10%).
When it comes to rental expectations, respondents in NI expect rents to increase overall in the short-term, with a net balance of 13% expecting rents to rise at an all-sector level over the next three months. But again, the outlook for industrial is in contrast to office and retail.
Rents in the industrial sector are expected to rise over the next three months, with a net balance of 70% of NI respondents expecting an increase. In contrast, rents in both the office and retail subsectors are expected to fall through the third quarter of this year (net balances of -20% and -10% respectively).
On the 12-month horizon, NI surveyors remain optimistic overall on the outlook for commercial property rents too. A net balance of 7% of respondents expect rents to rise at all sector level, albeit this is down from the 15% that was noted in the Q1 survey. Office and retail are expected to see rents edge lower, with net balance of -10% and -30% respectively, whilst rents for industrial space are expected to continue moving upwards over the next year (a net balance of 60%).
When it comes to capital value expectations, respondents in NI remain cautious. A net balance of -10% of NI surveyors expects capital values to fall over the next three months. Looking at the subsectors, the industrial sector continues to outperform the other subsectors on this front too, as a net balance of 40% of respondents anticipate capital values will rise over the next three months.
Garrett O’Hare, RICS NI commercial property spokesperson and Managing Director of Bradley NI says: “The commercial property market in Northern Ireland has faced turbulence in recent years, but it is encouraging to see the report noting that surveyors across NI are reporting a rise in overall occupier demand. With increases in national insurance earlier this year, inflation continuing to be a challenge for many businesses, and wider structural changes in the sector, it is unsurprising to see that demand for retail space remains subdued. Whilst the outlook on rent expectations looks more promising overall, we are cautious when it comes to the outlook of capital values as the sector continues to navigate the many challenges it is facing.”
