Fifty office blocks in planning for Belfast
ALMOST 50 new office buildings could spring up in Belfast over the next year, delivering more than 4 million sq ft in additional space, according to a study.
Property consultants Savills said the extra accommodation could provide enough space for up to 40,000 employees.
It found there were 47 new office buildings in the planning including nine developments are currently under construction or being refurbished.
A further 20 developments have been given planning approval while another 18 are at an earlier stage.
Almost three-quarters of the plans revolve around Belfast city centre and the Titanic quarter and City Quays area.
Head of office agency at Savills Belfast Simon McEvoy said Belfast had been left with a massive shortage of top-grade office accommodation as a result of the recession.
“New office construction and refurbishment in Belfast came to a complete halt as a result of the economic downturn and, with 1.2 million sq ft of take-up in the market since the last new office completion in 2012, we are now faced with a chronic under-supply of Grade A stock, which is currently sub 2 per cent and falling," he said.
Savills said office take-up in Belfast will reach 400,000 sq ft in 2016 representing a 30 per cent increase on 2015.
As a result, demand is outstripping supply, with prime office rents increasing by 25 per cent in 2016 – from £16 to more than £20 per sq ft – the fastest rate of rental growth in Britain and Ireland.
However, despite the increase, Belfast still has the lowest cost base of any regional centre.
“The lack of quality supply has long been discussed, however, the market lacked faith in the latent occupier demand and the potential for rental growth to reach levels to support new development," added Mr McEvoy.
"Now – as evidenced by the increase in planning applications – development has become viable again.”
“Although the pipeline figures look high, not all of these developments will proceed. The reality is that despite the demand/supply imbalance, the current pipeline is severely constrained by available equity and debt funding, with some requiring a pre-let to get out of the ground.
"As a result, there is little chance of us reaching a point of oversupply any time soon.”
Savills also said that Belfast would remain an "attractive location" for businesses to locate following Brexit.
It said there had been a noticable an increase in cross border enquiries with companies interested in bi-locating in Dublin and Belfast.
“The attractive fundamentals of Belfast, such as low occupancy costs, low labour costs, access to highly educated and skilled workforce, affordable high standard of living, excellent healthcare and education, proximity and connectivity to London and Dublin, have not changed," Mr McEvoy added.