Commercial property spend in Northern Ireland hit four-year high in 2021

Saudi Arabian investor Albilad Capital acquired Merchant Square in March 2021 for £87m. The redeveloped building is the headquarters of PwC in the north.

LAST year was the strongest 12 months for the north's commercial property sector since 2017, new research from CBRE suggests.

The record-breaking £87 million purchase of Merchant Square in Belfast city centre by Albilad Capital of Saudi Arabia, brought the annual spend to £290m, more than double the £136m in 2020 and the highest since the £316m recorded in 2017.

But while the total spend is up, the 30 transactions recorded by CBRE in 2021 was below pre-Covid activity.

Some 43 deals were done in 2017, with 36 and 32 recorded in 2018 and 2019 respectively.

The real estate firm said 43 per cent of the 2021 deals were for offices, while retail accounted for 40 per cent.

Some of the most notable deals included the £24.8m paid by London listed property investor Supermarket Income REIT for Balloo Retail Park in Bangor.

Manchester-based investment firm DS Properties also added to its Northern Ireland portfolio by snapping up Shane Retail Park on Belfast's Boucher Road for £23m.

Industrial property (11 per cent) and ‘alternatives' (6 per cent), accounted for a much smaller share of the market, but CBRE's senior director in Belfast, Gavin Elliott, said he expects that to change in the coming years.

“Northern Ireland has an attractive real estate yield advantage when compared with GB and ROI and we expect to see strong investor appetite in Northern Ireland continue into 2022, largely due to our unique location as a gateway between the UK and EU,” he said.

“Traditional core assets such as retail warehousing and well-leased prime offices will continue to attract suitable buyers, but we also expect to see investors targeting the alternative sectors such as build-to-rent, healthcare and logistics or ‘beds, meds and sheds', which will bode well for Northern Ireland.”

CBRE NI's managing director, Brian Lavery said the company has seen “a dramatic increase in investor appetite” for properties across all sectors, which he said was primarily driven by the low interest rate environment and the continuing improvement in the occupier markets and wider economy.

“Furthermore, with inflationary pressure being felt throughout the UK economy, investor sentiment for real estate will continue to strengthen,” he added.

“It's clear that there is growing appetite for Northern Ireland's commercial real estate from investors across the spectrum.

“With a raft of reasons to invest – from an exceptional talent pool to a high standard of living – Northern Ireland provides a strong draw for international companies looking for improved returns and we expect that to continue in 2022.”

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