Business

Citibank deal and private investor activity boost property investment volumes

COMMERCIAL property investment volume in Northern Ireland in the April-June quarter was 10 per cent above that of the same period in 2018 at £61.7 million, according to agents Lambert Smith Hampton.

Its regional investment transactions bulletin showed that although quarter two volume was the highest for six consecutive quarters, it remained 22 per cent below the five-year quarterly average.

Volume was boosted by the largest single deal Citibank's purchase of its Belfast headquarters in the Titanic Quarter in the middle of 2017 for £34m.

Elsewhere, Antrim Business Park was purchased by a private Northern Irish investor for £12.5m.

Year to date investment volume in the north stands at £104.6m, exceeding £100m in the first half of a year for the first time since 2016 and standing only 7 per cent below the five-year average.

Office investments have continued to dominate, accounting for two-thirds of quarter two volume. In addition to the Citibank deal, Timber Quay in Derry was purchased by a local investor for £5.3m while 15-17 Chichester Street in Belfast was snapped up for £1.4m.

At £17.3m, investment in industrial assets in Q2 exceeded the annual totals in this sector for the last decade. In addition to the Antrim Business Park deal, CD Group in Mallusk was bought by Alterity Investments for £2.6m and Portview House, Belfast was bought by a private Irish investor for £1.3m.

Notably the key investor type during the first half of 2019 is the ‘other' category, accounting for over half of volume year to date. In a change from the usual trend, significant investment has been made by a variety of investors including Citibank, local government and local company Hendersons.

Private Northern Irish investors continue to be the most active investor type (over half of transactions this year involved a local purchaser, with a total spend of more than £25m).

Martin McCloy, director of capital markets, Lambert Smith Hampton, said: “While Q2 volume suggests strong performance for the Northern Irish investment market, activity was dominated by a single owner occupier deal. The lack of local assembly, the risk of a no-deal Brexit and the current contest for the next Prime Minister continues to deter both vendors and buyers.

“We expect to see more activity in the second half of 2019 with a number of opportunities currently being offered off-market and deals already in legals expected to complete in the third quarter.”

He added: “As previously forecast, office investments continue to be the predominant asset class. Offering stronger fundamentals than retail, investors are hunting for secure income. That said, investors are also broadening their horizons, with industrial and alternative assets set to continue to perform well.”

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