NIEA to vacate Belfast HQ as Klondyke Building owner knocks another £2m from asking price

Listed Gasworks office building had been marketed for £10m less than two years ago

Wide angle of red brick Klondyke Building and its red brick chimney.
The Klondyke Building in Belfast's Gasworks business park, is now on the market for £6m.

The owners of a Belfast office building have knocked £2 million off its asking price as a government agency prepares to vacate the listed complex.

The 57,495 sq ft Klondyke Building in the Gasworks business park is fully leased to the Department of Finance for around £900,000 per year.

It is currently used as the base for the Northern Ireland Environment Agency (NIEA).

But the Department of Finance is not renewing its lease, with the NIEA due to vacate the building at the end of October 2024.

NIEA staff are expected to share another government site.

Built in 1891 by McLaughlin & Harvey, the listed building was placed on the market for £8 million just nine months ago.

It had been marketed for £10m in 2022,

But with the clock ticking down on the lucrative lease, it’s back on the market this week, with offers being sought of around £6m.

It’s understood the building was last sold in 2007 for £11.7m by Farrelly & Mitchell on behalf of Elm Private III.

At the time of the deal, the investors were described as “private farming clients”.

Split image showing inside the Klondyke Building and outside, with NIEA signage.
It's understood the Department of Finance currently pay around £900,000 per year to lease the Klondyke Building for the NIEA. The government agency is due to vacate the building on October 31 2024.

The NIEA move comes as the NI Civil Service implements a plan to cut its office estate by 40% over the next four years.

Government departments plan to share more office sites, with a number of publicly owned buildings already put up for sale in recent weeks.

Both the Department for Infrastructure’s headquarters in Belfast city centre and the former base of the Department for the Economy have been recently placed on the market.

Landmark House, the former Gasworks offices of Northern Ireland Co-operation Overseas, is also on the market, as the Invest NI-owned body is wound up.

The decision to slash the asking price for the Gasworks office building comes as the firm behind a £12 million office development in the same business park allowed the planning permission for the project to expire.

Planning approval was issued on February 21 2019 to Cromac Quay Ltd for the Gasworks office scheme.

An artistic impression produced as part of the planning application for 22 Cromac Place.
An artistic impression produced as part of the planning application for 22 Cromac Place.

But the five-year time limit finally ran out last week.

Cromac Quay Ltd, which is owned by the Jennings family, had property assets valued at around £9m in 2022.

The 22 Cromac Place office scheme was proposed for a site next to the Belfast headquarters of the Lloyds Banking Group.

On Tuesday, the banking group, which owns Halifax, announced it would vacate its Gasworks base and relocate its 1,600 staff to the new build Paper Exchange office development on Belfast’s Chichester Street.

Demand for office space in Belfast and other cities has fallen since the Covid-19 pandemic and implementation of flexible working policies.

While companies are opting for smaller office footprints with new tenancy agreements, many are also opting for modern developments with higher environmental, social and governance (ESG) credentials.

CBRE NI has said up to 75% of office stock in Belfast would not currently meet the criteria for energy performance certificate (EPC) legislation being proposed for England and Wales, which is expected to require a minimum of a ‘B’ rating for any commercial building being sold from 2030.