Growing Belfast office market driven by high quality space

The largest transactions during the year included HMRC’s pre-let of the 104,220 sq ft Erskine House

BELFAST'S office market recovered from a slow start to the year to end 2017 in a strong position according to the latest figures from property consultants Lambert Smith Hampton.

The company's Ireland Office Market has revealed that take-up levels reached 430,290 sq ft at the end of the year - 11 per cent above the five year average. Occupier demand for high quality space also increased the the last six months of 2017, with grade A stock accounting for two-thirds of take-up.

The largest transactions during the year were HMRC's pre-let of the 104,220 sq ft Erskine House, the completion of Concentrix's new 72,000 sq ft headquarters on the former Maysfield Leisure Centre site, and Tullet Prebon's lease of 34,692 sq ft across three floors at City Quays 2.

The completion of over 200,000 sq ft of quality refurbished space in 2017 was also critical in meeting demand. Notable deals in refurbished properties included First Derivatives' lease of 25,038 sq ft at the Weaving Works and Spence and Partner's lease of 9,212 sq ft at the Linen Loft.

The technology, media and telecoms (TMT) sector has been another key driver of demand, responsible for 35 per cent of take-up in 2017. In addition to the Concentrix headquarters, other TMT deals included HCL at Millennium House, Wireless Group at City Quays 2 and ITV at City Quays 2.

Looking ahead and over 300,000 sq ft of supply will be added to the market during 2018, including the 150,000 sq ft Nine Lanyon Place, which will be ready for occupation in the third quarter of 2018.

Head of agency at Lambert Smith Hampton in Belfast, Stuart Draffin said the latest figures are positive.

“Demand for good quality office space remains strong in Belfast, with take-up in 2018 expected to exceed 400,000 sq ft for the third consecutive year. After robust rental growth in recent years, prime headline rents are forecast to stabilise during 2018 with only a small increase anticipated. Headline rents will reach £22 per sq ft by year end.”

Greg Henry, associate director of office agency at Lambert Smith Hampton in Belfast said there are definite signs of confidence in the market

"In recent years development in Belfast city centre has been relatively healthy, although speculative development has been limited with new build projects predominantly driven by pre-lets. In contrast, at the beginning of 2018 four schemes are currently under construction totalling 496,220 sq ft, half of which is speculative development.

“Furthermore, there are a number of new office developments poised to begin and with demand being consistent, we anticipate that prior commitment from potential tenants will be forthcoming to initiate some of these large new build schemes," he added.

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