Trends and transactions of 2018 - a firm footing on often unsteady ground
THROUGHOUT 2018, the commercial property market in Northern Ireland has been characterised by a number of significant transactions.
Hotels and student accommodation have taken precedent, alongside a growth in demand for the rental of residential accommodation, particularly in the city centre.
A joint venture between contractor Watkin Jones and developer Lacuna has recently secured approval for what is said to be Belfast's first build-to-rent Private Rented Sector (PRS) scheme.
The £15 million work on the Cathedral Quarter project is expected to start in January 2019, and with completion forecast for early 2020, will further increase the city centre residential population.
Awarded commercial agent of the year 2018, the team at Lisney has headed a number of major deals, including the £15.2m sale of Obel 68 to Belfast Harbour, and the sale of The Metro Building for £21.8m, in what has been the biggest deal so far this year.
In total, investment volumes surpassed £70m in Q3 of this year, with office investment dominating the market.
The reported move of PWC to Merchant Square at Wellington Place in Belfast, alongside notable interest in the 300,000 sq ft McAleer and Rushe and Belfast City Council office development, the Sixth, will likely add to the total office take-up throughout 2018.
We estimate that office take-up will reach over 800,000 sq ft by next year, which is twice the long-term average take-up of approximately 340,000 sq ft per annum.
Over recent months, the local retail headlines have been dominated by the fire that gutted the Bank Buildings, home to Primark's Belfast flagship store.
However, despite these headlines and the subsequent disruption to neighbouring retailers and footfall in Belfast city centre as a whole, we are confident shopping centres and retail parks will continue to hold up as we step into 2019.
The off-market acquisition of 40-46 Donegall place, marked the first purchase in Northern Ireland, and only the second in the United Kingdom, for French asset managers, Corum Asset Management. Acquired for £16.4m, this remains one of the most prominent retail investment transactions in Northern Ireland this year.
For 2019, it is difficult to see where the commercial property sector is headed due to the uncertainty surrounding Brexit, and how businesses will be affected come March next year still remains unclear.
A sensible approach to these challenges is necessary if the commercial property market is to maintain its resilience.
We remain hopeful that the potential of the technology, digital and creative industries will continue to flourish in Northern Ireland as firms continue to invest in the region.
To ensure the continued success of the commercial property market, in a landscape which is at times unsteady, at Lisney, we aim to continue to concentrate on our core values of providing excellent customer service in all of our future dealings.
:: Declan Flynn is managing director of Belfast-based commercial property agency Lisney, which works on behalf of many of Northern Ireland's most significant investors and developers as well as major retailers and businesses.