Business

Belfast office market on course to exceed 10-year average despite fall in take-up

LETTINGS: The office market has been further boosted with planning permission granted for further development at Bedford Square, Belfast
Gareth McKeown

OFFICE market activity in Belfast is on course to exceed the ten-year average for demand according to a new industry report.

Lambert Smith Hampton's Belfast Office Market Report for the first half of the year has revealed a surge in activity, driven by public sector and professional services occupiers, while the research states that 100,000 sq ft of space is currently under offer.

Grade A stock dominated deals during the first six months of 2017, accounting for 86 per cent of all activity. Availability has more than doubled in the first half of 2017, rising by 56 per cent to around 982,000 sq ft, boosted by the imminent completion of a wave of speculative development and refurbishment projects.

However, at 167,568 sq ft, take-up in the first six months of 2017 was down 20 per cent on the previous six months and 28 per cent on the same period last year.

During the past 12 months, demand has been driven by public sector and professional services occupiers, together accounting for 61.8 per cent of take-up. Notable occupiers in the public sector included HMRC (104,220 sq ft) and Tourism NI (17,649 sq ft). Within professional services notable occupiers included KPMG (39,374 sq ft) and Axiom (26,100 sq ft).

Meanwhile development in Belfast has gained momentum, with 815,000 sq ft of speculative works anticipated to commence over the next 12 months, including One Bankmore Square (250,000 sq ft), Bedford Square (215,000 sq ft), The Paper Exchange (200,000 sq ft) and Olympic House (150,000 sq ft). Additionally there is 1.8m sq ft of planning approved office space and 641,000 sq ft with planning applications pending.

Head of agency at Lambert Smith Hampton in Belfast, Stuart Draffin said the outlook for the office market is positive.

"Healthy demand exists among occupiers, and there has been a welcome improvement in quality supply and speculative development. With an additional 100,000 sq ft of office space agreed and some of the lowest occupational costs in the UK and Ireland, we forecast that 2017 take-up will exceed the 10-year average and total circa 300,000 sq ft.”

Associate director of office advisory at Lambert Smith Hampton, Belfast added:

“One year on from the Brexit referendum take-up in the office market during the 12 months after the vote has totalled 379,772 sq ft, 30 per cent above the 10-year average, but 16 per cent down year-on-year. Given the political instability that followed the referendum both locally and nationally, the office market has been very resilient and continues to demonstrate Belfast's attractiveness as an office location.”

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