'Germans are coming with money to invest' top CBRE analyst reveals

Artist's impression of the proposed Weavers Cross scheme in Belfast
Gary McDonald Business Editor

THE Germans are coming . . . and Belfast is set to be a huge beneficiary from their investment millions.

One of commercial property firm CBRE's most senior global advisers revealed that, with the UK's exit from the EU now ratified, more companies from Germany are seeking to establish a presence in their former fellow European state.

"Until now, the Germans haven't invested in Belfast. But that's going to change this year, because Northern Ireland is Germany's next place up," according to Spencer Levy.

Chairman of Americas Research and one of CBRE’s most knowledgeable and respected global research analysts, Levy was speaking at CBRE's regional real estate market outlook event, which this year was hosted online and which had more than 700 dial-ins.

“The noise of Brexit is over, and Belfast will benefit from a rebound, with Germany among those who have their sights on this great city,” he said.

He didn't name names. But one Berlin-based investment company and established real estate financier, which has backed more than 40 projects with capital greater than £450 million in only four years in Germany, said it planned to export its unique business model to the UK.

It launched a new office in London’s Mayfair last autumn, but said it wants to focus on investment opportunities of £5 million to £50 million a number of other UK cities, possibly thought to include Belfast.

Levy insists Belfast is in a unique position to take advantage of pent up demand and high levels of liquidity in the commercial real estate sector.

He told the webinar: “Belfast has two things in scarce supply - a deep talent pool and a hugely attractive yield advantage when compared with neighbouring cities like Dublin and London.

“Traditional core assets, such as well-leased prime offices, will continue to attract buyers, but you are going to see investors also targeting the private rented sector, logistics and pharma/biomedical properties in increasing numbers, which will be good for Belfast and the rest of Northern Ireland.”

CBRE's regional managing director Brian Lavery, who earlier this month led a management buy-out of the firm CBRE UK, said he was optimistic about investment levels in the year ahead.

“While real estate on the whole is not immune from market fluctuations, as an asset class it continues to offer relative stability of income and capital appreciation, which is attractive to investors at this time,” he said.

“But we expect much of the activity to take place in the second half of this year by which time we expect the rollout of Covid-19 vaccines to allow investors to travel to inspect buildings and conduct due diligence.”

Investment activity across Northern Ireland fell by 36 per cent to £136 million in 2020 amid limited movements due to Covid challenges.

Also addressing the webinar, Belfast City Council chief executive Suzanne Wylie said: “Under extremely difficult circumstances, the commercial real estate sector locally has shown its resilience yet again and is buoyant, with ongoing investment in a number of major regeneration projects in the city across the public and private sector.

“This highlights to a global investor audience the very best of what Belfast has to offer, not only as a sound investment proposition, but also a top-class place in which to live, work, learn and visit.”

She outlined a number of "game-changing" commercial schemes currently under way in the city including the £380 million Weavers Cross high capacity transport hub on the site of the existing Europa bus centre and Great Victoria Street train station.

It is part of the council’s agenda for a new vision for Belfast in 2035, which has an ambition to attract 50,000 new jobs and £1 billion investment to regeneration projects in the city.

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