Commercial property market gets its mojo back with £200m in NI deals

The £199m of third quarter deals in the north were boosted by the £123m purchase of CastleCourt shopping centre in Belfast's Royal Avenue by property firm Wirefox
Gary McDonald Business Editor

DEALS worth just shy of £200 million were agreed or signed off in Northern Ireland between July to September as the commercial property market got its mojo back.

That's nearly TWICE as much activity than in the previous four quarters combined, when the total transactions totalled just over £100 million.

And according to property consultants Lisney, who compiled the figures, it puts the market "well on course" to meet forecasts of more than £300 million of activity in 2017.

Lisney's third quarter bulletin, covering activity in the office, retail and industrial sectors, has revealed growth across the piece.

Just £26m had been transacted in the calendar year so far, but that jumped to £199m in the third quarter, significantly boosted by the £123m purchase of CastleCourt by Holywood-based property firm Wirefox.

And the investment figure is set to soar given that several notable investment properties are still on the market including Longwood Retail Park in Newtownabbey, priced at £47.78m.

Other headline findings in the latest Lisney report include:

• The take-up of office space more than doubled to 91,557 square feet during the period with a healthy spread of take-up ranging from 1,000 sq ft to 25,000 sq ft.

• The supply of units in prime retail locations is drying up.

• Notable transactions in the industrial sector in the third quarter amounted to 263,788 sq ft and included the former Denny's site in Portadown.

• In the retail sector, most activity happened outside Belfast city centre, buoyed by coffee operators such as Caffe Nero, which saw new transactions on the Ormeau Road and in Newcastle.

But the report highlights some negatives, especially in the industrial sector, where Caterpillar are proposing to downsize while concerns over Brexit and the lack of a Stormont administration are likely to result in lower activity.

Declan Flynn, managing director of Lisney Northern Ireland, said: “Our prediction of investment volumes hitting £300m is on course, with a number of transactions including Riverside Retail Park in Coleraine set to complete before year end. Indeed, with Longwood Retail Park in Newtownabbey currently on the market, we could potentially surpass that estimate.”

He added: “Office deals completed showed a mix of both indigenous occupiers and new market entrants taking space, which is an encouraging indicator of market resilience given the ongoing political uncertainty.

“But levels across the year will be less than the long-term average of between 300,000 and 400,000 sq ft annually.

“Belfast's reputation as a hotbed of activity in the tech and digital sectors continues to gain momentum and the quarter saw Causeway Asset Management launch Chichester House as the city's first property to seek a WiredScore certification.

“In retail, we anticipate a busy start to the fourth quarter with retailers pushing to finalise acquisitions and openings prior to Christmas.

“However, supply in key areas will continue to hamper progress, most notably in Belfast city centre and in the major border towns where we expect to see the euro spend surpass 2016 levels."

He added: “Demand in the industrial sector is expected to come from export-focused manufacturers, reflecting the fall in the value of sterling.

“This is despite negativity in the market due to ongoing uncertainty around Brexit and local political impasse.”

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