Business

Belfast city centre retail surge creates ripple effect

Donegall Place in Belfast city centre,which is enjoying a renaissance. Picture: Mal McCann
Donegall Place in Belfast city centre,which is enjoying a renaissance. Picture: Mal McCann Donegall Place in Belfast city centre,which is enjoying a renaissance. Picture: Mal McCann

VACANT retail units add nothing to a shopping trip into town – but the good news is they’re on the decline.

The retail property market was thrust into the headlines last week with the announcement that two of the north’s biggest retail parks – Junction One and The Outlet – have gone on the market with an overall guide price of around £60 million, with other significant retail schemes due on the market in the coming months.

These sales are feeding the strong demand for local retail investment property which has been growing significantly recently. This has been underpinned by the fundamentals of reduced retail vacancy and strong occupier demand.

During what was a busy summer for the retail property market, well-established brands such as DW Sports, Gap and Sketchers began trading in new units in Donegall Place, with reports indicating that they are all surpassing initial trading expectations. Warren James Jewellers has opened just up the street in Castle Court, meanwhile, with a number of further new openings expected soon at the complex.

The positive dynamic surrounding the retail property market in Belfast is being fuelled further by the fact that names such as Lifestyle Sports, Cos, Aeropostale, Bestseller, Peacocks and Boux Avenue are currently engaged in active negotiations about new premises.

This surge in activity has injected some competitive tension into the prime Belfast market, leading to rental growth and reduced vacancy rates. What’s also important to note is that a very clear outward ripple effect is taking place, with the strong demand from Belfast city centre showing its mobility by emanating throughout various locations in Northern Ireland.

As well as now being part of Castle Court’s offering, Warren James has opened a jewellers in Bow Street Mall in Lisburn and is actively seeking a number of additional units throughout Northern Ireland. Sketchers will be hoping to replicate its success in Belfast in its new store just opened in Craigavon’s Rushmere Centre, while Bestseller is expanding with a new store in Bloomfield Centre in Bangor, and others in negotiations.

While the fall in city centre commercial rates earlier this year is undoubtedly a factor in the rise in retail demand, the buoyancy of restaurateurs in the retail market in recent months has also played a crucial role.

The new Boucher Square development in Belfast has proved to be a great success for this sector, with Ed’s Easy Diner, Frankie & Benny’s and Costa Coffee all opening in July with Nando's still to come. This upwards curve in restaurateur demand for retail sites looks set to continue, with major UK-wide players such as Five Guys, Zizzi, Ed’s Easy Diner and Carluccios all agreeing new lettings in Belfast city centre.

This healthy outlook for the retail property market is reflective of encouraging projections for the rest of the year for the Northern Ireland commercial property sector in general.

For 2015, we expected investment transactions to achieve value in excess of £300 million for the year - a figure much higher than first anticipated.

Purchasers of the 2014 loan books are emerging as the key sellers in 2015, and the current appetite for property from local, UK and even international investors would suggest that this will continue into 2016.

:: Nicky Finnieston is director of investment and retail with Belfast-based commercial property agency Lisney, which works with many of Northern Ireland's most significant investors and major retailers throughout the UK and beyond.