Uncertain political climate remains difficult backdrop for inward investors
DESPITE a modest level of commercial property transactions so far this year, the uncertain political situation remains a difficult backdrop for inward investors, a report from agents Lisney shows.
Some £41 million worth of commercial deals were signed off in the first quarter of 2019 compared to just £10m within the first quarter of 2018, and a further £52m of deals agreed during this period.
Lisney's regional managing director Declan Flynn says: “In light of the local political stalemate and the missed Brexit deadline, it's unsurprising that the majority of the transactions have been completed by local investors.
“The political malaise creates a barrier for inward investment, though the tentative nature of the market is mirrored right across the UK, and given the assets either on the market, agreed or quietly available, we do see potential for increased transaction levels throughout 2019.”
Additional headline findings from Lisney’s latest commercial property report revealed that:
:: Notable investment transactions include James House in The Gasworks sold for £14m and Donegall House for £9.6m.
:: £52m of investments marketed for sale in Q1 are now noted as ‘sale agreed’. This includes Gateway Offices in Titanic Quarter, Timber Quay in Derry, and Antrim Business Park, Kilbegs Road
:: 106,779 sq. ft. of office take up was reported in quarter one
:: Immediate availability of grade A office space within Belfast remains limited at less than 200,000 sq ft spread across a number of buildings
:: Prime retail locations in Belfast city centre are achieving rents of £150 per sq ft
:: Discount retailers continue to be among the most active within the sector
:: Demand for industrial/logistics space driven by owner occupiers
:: 532 new jobs announced in the industrial and logistics sector will prompt movement through expansion or relocation.
Mr Flynn added: “2018 was a record-breaking year for office take-up locally which totalled 885,000 sq ft. Unsurprisingly the take up in the last three months – across 14 transactions - is less than take up within the same period last year (270,310 sq ft) but the sector remains dominated by tech and digital companies.
“The trend for co-working space locally has also continued to rise with some operators close to capacity. It is understood Eagle Star House will be transformed into design-led flexible workspace.
“Whilst availability of grade A space in Belfast is limited at present, the completion of Chichester House in Q4 will bring 46,000 sq ft of much needed grade A stock to the city centre and the fact that there is a strong pipeline of stock to be delivered throughout 2020/2021 is encouraging.”
Of the retail sector, Mr Flynn said: “Across the UK, the retail sector has seen the lowest quarterly investment volumes traded in a decade. Company voluntary agreements (CVAs) and administrations continue to be among the headlines and Belfast city centre continues its recovery following the Primark fire last summer.
“But all is not lost, with B&M and Home Bargains unveiling plans for new stores at Belfast’s Park Centre and further acquisitions in the pipeline going forward. The food and grocery sector remains buoyant with Lidl leading the way following its acquisition of a 26,000 sq ft site at The Junction.
“Further retailers acquiring sites recently include O2, Radley, Toy Town, Superdrug and Greggs. We expect to see an increased number of openings in the next six months, spearheaded by food, beverage and grocery retailers.
“Activity within the industrial/logistics sector continues with a mix of letting and sales with demand being driven by owner occupiers seeking to purchase for their own requirements.
“Companies such as CDE Global, Terex Corporation, Edge Innovate, Finnebrogue Artisan and Boyce Precision Engineering have announced the creation of a combined 532 new jobs alongside intentions to either extend facilities or purchase new premises.
“The first quarter of the year also saw trade only kitchen supplier Howdens enter the Northern Ireland market with a number of branches including a double bay unit in the Meadows Business Park.”
The latest report can be viewed at https://belfast.lisney.com/research-reports/northern-ireland-commercial-update-q1-2019/