Business

Lisney report shows up and down 2016 property figures

An artist's impression of the office building at the City Quay phase 2 site, which is currently under construction

INVESTMENT in the north’s commercial property market plunged by more than 50 per cent in 2016 amidst ongoing political uncertainty, a report has found.

Research by leading property agent Lisney revealed that investment levels dropped to £213 million last year, down from 2015’s five-year high of £420m.

Elsewhere, however, figures remained postive.

Take up in office space more than doubled to 535,000 square feet, also a five-year high.

Meanwhile, the retail sector expanded at its fastest rate in 14 years.

Interestingly, half of the total take up related to the redeveloped Clarendon House, highlighting the lack of high-quality, new-build stock as opposed to refurbishments.

There are many new office developments planned for the next few years, however. City Quays nine-storey stage two project is currently under way and, more recently, Richmond Group's announcement yesterday that their £65m mega-office space on the Dublin Road will be going to public consultation next month.

Although the future developments in the pipeline are positive, with most completion dates not until 2018 refurbishment schemes are likely to plug the short-term office supply gap.

Prime retail vacancy rates in Belfast went from having one in five shops empty in 2014, to just one in ten last year. Furthermore, industrial vacancy rates dropped by a quarter and take-up increased by 12.5 per cent.

Among the most significant commercial property transactions in the final quarter of 2016 was the purchase of Lisnagelvin shopping centre by Cordatus Property Trust on behalf of CBRE Global Investment Partners for £14.73m, and the purchase of the DSG investment at Sprucefield by Aberdeen Asset Management.

In 2017, Turkington’s Laganbank scheme in Lisburn and Parker Green’s extension at the Quay’s in Newry are set to come online, potentially satiating the appetite for prime retail space.

Declan Flynn, managing director of Lisney Northern Ireland, said the fall in investment reflected the prevailing challenges currently facing the investment sector, such as the triggering of Article 50, the local political situation and the potentially more protectionist agenda coming out of the US.

"Uncertainty at a local and national level will continue to stall investment decisions, but our fundamentals remain strong in all sectors," he added.

"The market is on a solid footing and, with low interest rates, commercial property remains an attractive proposition."

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