Political stalemate is damaging north's attractiveness for investors, claims CBRE boss

CBRE NI managing director, Brian Lavery.
CBRE NI managing director, Brian Lavery.

A PROMINANT figure in the property sector has claimed the north's attractiveness for investors has been impacted by the political impasse at Stormont.

CBRE NI boss Brian Lavery said the political stalemate over the Northern Ireland Protocol is throttling further potential investment.

“Investors have been drawn to the Northern Ireland market due to its unique location as a gateway between the UK and EU, although the region’s attractiveness has been dulled by a lack of direction and political leadership at Stormont," he said.

“Progress on the Northern Ireland Protocol and a restoration of the Executive would boost the confidence of both local and international investors alike.”

The comments came as a new report from CBRE revealed commercial property investment hit a seven-year high last year, after a flurry of retail deals.

A total of £330 million was invested across 36 transactions over the 12 months, almost 14 per cent up on the £290m spent across 30 deals during 2021.

CBRE said it marked the highest level of investment since 2015 with retail accounting for half of all transactions.

The real estate specialist said the investment pipeline remains strong in early 2023, with around £86m worth of deals due to close by the end of January.

But, it said the combination of rising interest rates, concerns of an economic slowdown and political uncertainty is expected to hit the market going forward.

The notable retail deals in 2022 included the sale of Cityside Retail and Leisure Park in Belfast (£14.15m); Ards Shopping Centre in Newtownards (£15.75m); and Boucher Retail Park to the Frasers Group (undisclosed).

CBRE did not list the reported sale of Rushmere shopping centre in Craigavon to a GB property firm for £56m.

Other deals included the sale of Central Park in Mallusk for £17m and the Premier Inn Four Corners in Belfast, which was sold to a private local investor in July for £12.2m.

The research found 47 per cent of transactions were led by local investors, followed by institutional investors (34 per cent) and property companies (19 per cent).

Gavin Elliott, senior director at CBRE NI, said: “Investors have been busy in the Northern Ireland commercial property market in 2022 and that theme looks set to continue this year despite the challenging economic backdrop.

“However, within the investment sector we can take comfort that the banks remain well capitalised and that there is a good supply of capital looking to be invested into commercial real estate, albeit at a realistic pricing.

“Offering further support is the fact investors in Northern Ireland are still attracted by the yield arbitrage when compared to similar assets in GB and the Republic.”

CBRE said current yields for prime release estate in Northern Ireland stands at 6.5 per cent against 6 per cent in major regionals in GB and 4.35 per cent in Dublin.