THE future growth of the commercial property market in Northern Ireland is reliant on a fully functional Stormont Executive according to CBRE.
Recent research from the firm shows the north's commercial property market continues to be resilient despite the ongoing political uncertainty, but said there is no doubt the impasse has had a negative impact.
“The current political situation has no doubt had some negative impact on the local economy and commercial property market, and will continue to do so should the Stormont stalemate persist," CBRE managing director Brian Lavery said.
“During an unsettling period of political uncertainty, the continued future growth of the commercial property market in Northern Ireland is reliant on a fully functional local Government being put in place.”
The Northern Ireland commercial investment market has been largely dependent on Great Britain and international investment spend, according to the most recent investment analysis in Northern Ireland. The two markets make up 87 per cent of the £1.64 billion spend over the last five years from 2013 to 2017.
CBRE director, Gavin Elliott believes this can grow even further and feels Brexit must be viewed as an opportunity.
“It is important that Belfast takes full advantage of its unique position between Dublin, London and Europe to drive further growth through real estate investment funds in Great Britain and further afield.
“The local market should be well placed for further future Great Britain and international investment following the deal agreed between the Conservative Party and the DUP, which secured an additional £1 billion funding for Northern Ireland."
The north's investment market throughout 2017 has seen an increase in transaction volumes from the previous year, with £316 million being invested across 43 separate transactions. This compares to £248 million invested across 36 transactions in 2016. Notable transactions include the £123 million sale of CastleCourt Shopping Centre to Wirefox, Tesco Extra, Newry at £27.3 million to Investec and Great Northern Retail Park in Omagh to an Northern Ireland pension fund at £9.2 million.
The retail sector has also continued to perform well with the advantage of the current exchange rate and cross-border trade. The market saw a plethora of new entrants in 2017 as well as increased footprints by a number of relatively new retailers including Smiggle, Oliver Bonas, Hotel Chocolat, Sostrene Grene and Newbridge Silverware.
The office market finished the second half of the year in a considerably stronger position with 33 transactions completed bringing the yearly total to 430,290 sq ft, while 2017 saw a number of lettings and freehold acquisitions agreed for new design and build options. This includes large office transactions to HMRC, All State and Concentrix.
Meanwhile six hotels transacted in 2017 worth £42 million, with a number of proposed completion dates agreed for the first quarter of 2018. The bedroom stock in Belfast further increased to approximately 3,600 with the opening of The Titanic Hotel in September, extension to the Bullitt Hotel in November and part of Ten Square’s extension during the year.
CBRE expects that yields across all sectors within real estate in Northern Ireland will remain relatively stable over the next 12 months.
