Office development slows to a near standstill in Belfast, new report shows

Just one major office scheme was started in Belfast during 2023

Landscape view of Belfast city centre's skyline, made up of buildings and the Harland and Wolff Cranes.
Deloitte's annual crane survey showed just six major schemes were started in Belfast during 2023, including just one office development. (DARREN KIDD)

Office development has slowed to near standstill in Belfast with developers switching to residential and hotel projects, according to a new report from Deloitte.

The annual crane survey from the services giant showed three office schemes were completed in Belfast during 2023, but just one major office project was started last year, the lowest number since 2016.

The industry monitor said 20 major construction projects were either completed or in development last year in Belfast, compared to 23 the year before.

But just six of those projects were new starts, largely the result of investors shying away from office development.

Changing working patterns combined with the availability of grade A office space appeared to impact the appetite for new office schemes.

Now in its eighth year, Deloitte’s report analyses offices, residential, hotels, retail, education and student housing, and is considered by some a barometer of developer and investor sentiment.

As the fourth anniversary of the declaration of a Covid-19 pandemic approaches, the services firm said the development pipeline in Belfast points to a change in city centre use.

Student accommodation, hotels and new residential schemes were the key drivers of development activity in Belfast during 2023.

Four of the nine major developments completed last year were student accommodation schemes, adding 1,000 new student rooms.

Another 774 student units are due to be completed in 2024.

The student accommodation boom is set to continue with Queen’s university acquiring three sites in the city as part of a £100 million programme to meet an estimated 3,000-room deficit in supply.

Major investor-led student schemes are also in the works on Great Victoria Street, Dublin Road and in the Titanic Quarter.

Belfast also broke new ground in residential development during 2023, with five residential projects under construction, which will create almost 1,000 new homes.

That compares to just 306 new homes built in the city centre since 2016.

The largest of the new schemes is the Loft Lines development in Titanic Quarter, which accounts for 778 of those homes, made up of 627 build-to-rent apartments with 151 affordable and social housing units.

Planning permission was granted last month for another 700 residential units in central Belfast.

Landscape view of the River Lagan and the Titanic Quarter of Belfast.
A view from City Quays showing work starting on the Loft Lines residential scheme. The 778 units include 627 build-to-rent apartments with 151 affordable and social housing units.

The hotel development pipeline is also strong, with two hotels under construction and planning permission for another nine schemes.

Meanwhile, Deloitte flagged the River Lagan waterfront as an area of Belfast that has yet to reach its full potential.

Osborne + Co said last week that it remains committed to the £500m Waterside Belfast development on the former Sirocco works site.

But the current lull in demand for new office space in means it’s unlikely the 800,000 sq ft of offices included in the Waterside proposal will progress any time soon.

Belfast Harbour has also submitted plans for the office-led City Quays 5 scheme on Donegall Quay.

But it could be a number of years before the project advances to the construction stage.

Looking ahead, Deloitte said the opening of Belfast Grand Central Station to passengers at the end of 2024 will be a significant milestone, with works completing in 2025.

Weavers Cross, which proposes 1.3m sq ft of office, residential, student housing, retail and leisure space around the new transport hub, is also in the long-term pipeline.

McAleer & Rushe’s development arm MRP has been appointed as commercial partner for the speculative venture.

Mel Wilson, director in real estate at Deloitte, said: “While the overall picture is one of more subdued development activity in the city centre, with fewer new starts and a slightly lower number of schemes under construction or completed, there continue to be real signs of confidence in Belfast, with a number of landmark schemes progressing.”

Colin Mounstephen, director at Deloitte in Belfast, said the large volume of student accommodation built in the city combined with modest increases in residential stock and hotel rooms, has seen a substantial rise in the number of people living and staying in the city centre.

“As in other cities in the UK and Ireland, a gap has been created by slow returning workers and office vacancies.

“Increasing the number of people living in Belfast city will be important for its vibrancy, resilience and long-term sustainability, and is also of enormous social importance given the constraints on existing housing stock across the city.”