Growth predicted in North’s commercial property market, says CBRE

Agents note potential £78m of investment deals for Q2 with little sign of Brexit impact

The Great Northern Retail Park in Omagh (£9.25 million) was among the notable deals in the North in the first quarter

The Great Northern Retail Park in Omagh (£9.25 million) was among the notable deals in the North in the first quarter

 

A potential £78 million (€91m) pipeline of investment deals is on the table for Northern Ireland’s commercial property sector in the second quarter of the year according to latest market reports.

CBRE Northern I’s latest Market View report suggests that while the commercial property market in the North got off to a slow start in the first quarter of the year with an estimated £7.657 million transactions, it is set to change in the second quarter.

The report also details how initial concerns about a Brexit impact on the local commercial property sector have failed to materialise but CBRE does acknowledge that there may yet be some firms who put decisions in the North on hold until further details emerge regarding the UK’s future arrangements with the EU.

CBRE’s UK research teams believe financial centres from Paris to Frankfurt and English speaking centres such as Dublin could be the top destinations if international financial services corporations decide to relocate from the UK because of Brexit.

“We will have to wait and see what impact, if any, this might have on Belfast, ” CBRE NI adds.

Sterling weakness

In the meantime according to the property agents the local retail and hospitality sectors are continuing to benefit from the weakness of sterling.

In particular the property agents say dominant retail locations in border areas are seeing a lot of letting activity while there has been a significant number of new hotel developments launching in Belfast.

Separately, CBRE’s latest market report details how occupational markets in the North were the most active during the first quarter while a limited number of investment sales were completed in the same period.

Gavin Elliott, director, capital markets at CBRE Northern Ireland, said among the more notable investment sales was the Great Northern Retail Park in Omagh (£9.25 million) and Fountain House, Donegall Place in Belfast (£14.25 million) in the first quarter.

Mr Elliot said one of the more noticeable trends this year had been the “dominance” of private equity firms and high net worth local investors who had been the most active buyers and sellers in the first three months of the year.

“We do also envisage a number of institutions beginning to invest in Northern Ireland, following an absence from the market in 2016,” he added.

Office market

The latest market report looks at how the spotlight has swung to the Belfast office market thanks to a number of new-build schemes scheduled to start in 2017 and will deliver new Grade A office accommodation.

These include the £26 million scheme at Titanic Quarter by Dublin headquartered Harcourt Developments and Belfast Harbour Commissioners, to jointly develop Olympic House, a 148,000sq ft office building, and the new planning applications for Merchant Square which include a redevelopment of Belfast’s Oyster, Ferguson and Royston House.

The proposed scheme could potentially deliver a further 208,000sq ft during 2018.