COMMERCIAL property investment transactions plunged by around £150 million in Northern Ireland last year, according to agents CBRE.
Domestic and international political events such as Brexit are though to have been contributory factors as just £248 million was invested across 36 transactions in 2016 compared to £400 million in the previous 12 months, the firm says.
There were few institutional investor deals transacted across the year, with greater numbers of private equity groups, local high net-worth individuals and property companies acquiring assets (an example being Damolly retail park in Newry being sold to the MJM Group for in excess of £30 million).
But CBRE claim that while 2016 was a "comparably underwhelming year", this could translate into strong figures for 2017.
Gavin Elliott, director of capital markets at CBRE, said: “We are anticipating a number of major investment transactions that were stalled by the radical events of 2016 to complete early in 2017.
"The investment market in Northern Ireland will see healthy interest from a broad spectrum of investors including private equity, property companies, high net-worth individuals and institutional investors.
“We have now entered a period of political uncertainty where the investment market will be more focused on core income and strong investment fundamentals. However, we believe commercial real estate will continue to be favoured and viewed as a safe-haven in comparison to other asset classes.”
It is expected that the majority of transactions during 2017 will emanate from financial restructuring and investors crystalising profit following the completion of asset management strategies.
Mr Elliott added: “With a strong occupational market, low interest rate environment and inflationary pressures on the horizon, the appetite for commercial real estate is expected to be buoyant across 2017.
"And given the proposed reduction of corporation tax to 12.5 per cent in April next year, Northern Ireland is now a hugely attractive location for investment, though the willingness of lenders to support investors is increasing and will play a key role in influencing developers to undertake new projects going forward.”
