Business

Trading places - two key tenants vacate Victoria Square

CHANGING RETAIL: A property report from CBRE says Belfast's Victoria Square is losing two key tenants in H&M and River Island, but is gaining three others in The White Company, Sculpted by Aimee and Rituals
CHANGING RETAIL: A property report from CBRE says Belfast's Victoria Square is losing two key tenants in H&M and River Island, but is gaining three others in The White Company, Sculpted by Aimee and Rituals CHANGING RETAIL: A property report from CBRE says Belfast's Victoria Square is losing two key tenants in H&M and River Island, but is gaining three others in The White Company, Sculpted by Aimee and Rituals

A NUMBER of high-profile retailers are trading places in Belfast, according to a commercial property insight from agents CBRE, with Victoria Square losing two key tenants.

CBRE's latest quarterly report on the performance of the sector show that total investment transaction volumes in Northern Ireland over the first nine months of this year, at £277 million, was 59 per cent higher than the same period in 2022, with spending in the past three months alone reaching £122m.

And the report pointed to “positive leasing activity” in Belfast and across the north, with H&M confirmed

as a tenant at the former BHS site on Castle Lane in Belfast city centre.

Known as ‘The Keep’, H&M will lease 20,000 sq ft in what will be its flagship Belfast store as it plans to relocate from Victoria Square. River Island also plans to vacate the centre as part of a relocation to Donegall Place.

But on the flip side, Victoria Square - which recently celebrated its 15th birthday - continues to generate strong demand from new retailers.

Lifestyle brand White Company is leasing 4,900 sq ft at Victoria Square for what will be its first Northern Ireland store. Make up brand Sculpted by Aimee has also opened its first outlet there while beauty retailer Rituals is in the process of upsizing at the scheme.

“Retail investment witnessed the highest level of business over the period, accounting for 71 per cent of all activity across the year,” said CBRE NI managing director Brian Lavery.

“These are encouraging signs however the majority of the spend is locally sourced as we continue to see the decision-making of external investors into all sectors negatively impacted by local geopolitical factors.”

Indeed retail properties accounted for the largest transactions in quarter three, with Forestside shopping centre and Abbey retail park changing hands for £42m and £40m respectively.

One of the bedrooms at room2, the first new hotel in Belfast since 2020. The 175-bedroom nine-storey building has transformed Queen Street in the heart of Belfast city centre
One of the bedrooms at room2, the first new hotel in Belfast since 2020. The 175-bedroom nine-storey building has transformed Queen Street in the heart of Belfast city centre One of the bedrooms at room2, the first new hotel in Belfast since 2020. The 175-bedroom nine-storey building has transformed Queen Street in the heart of Belfast city centre

But the north's hotel sector - which experienced strong trading during the first eight months of the year as occupancy levels surpassed 2019 levels and average daily rate (ADR) continues to achieve record highs - has seen some major transactions.

The four-star 202-bedroom hotel Hilton Belfast was purchased off market by Pandox AB for a £40m in July, the largest hotel transaction ever in the city. The vendor, Starwood Capital, had purchased the Hilton in 2018 as part of a portfolio known as Project Dragonglass and subsequently spent £10 million on a full refurbishment of all public areas and bedrooms.

And the first new hotel in Belfast since 2020 is due to open on October 16. Commercial and residential developer Oakland Holdings has completed the north’s first ‘Hometel’ called room2. The 175-bedroom, nine-storey building has transformed Queen Street in the heart of Belfast city centre.

Meanwhile the CBRE report said the industrial and logistics market has been slow, which is in keeping with trends over the summer months, but notable deals include an agreement to lease 100,000 sq ft in Lisburn on a design and build basis.

The take up of office space in quarter three was just 38,149 sq ft, representing a substantial reduction on both the Q1 and Q2 figures of 43 per cent and 54 per cent respectively.

Mr Lavery added: “There is a large amount of secondary stock in the office market that will require significant investment to bring up to the required standard as regards sustainability and finishes, to make them attractive particularly to external investors.

“In order to ensure the feasibility of these projects, we envisage many of these buildings will have to be converted to alternative uses such as student accommodation or build-to-rent.”