After almost a year when no sizeable office developments were available in Belfast, agents are reporting considerable interest in a number of opportunities recently brought to the market.
The latest sales and lettings indicate yields have hardened to between six per cent and 6.75 per cent compared with eight to 10 per cent only three or four years ago.
Belfast agent O'Connor Kennedy Turtle is quoting £6.5 million sterling for a new 10-storey office investment with bank on ground floor in the commercial heart of Belfast. The building has 35,471 sq ft of accommodation.
Number 14 Great Victoria Street has a potential rental income of £468,810 per year representing an anticipated yield of 7.21 per cent gross based on vacant floors achieving rentals of £13.50 per sq ft.
It is in a prime location within the city centre business district, close to the Grand Opera House, Europa Hotel, Chamber of Commerce House, Great Northern Mall, Jury's Inn Hotel, Millennium House, Great Victoria Street Station and Glengall Street Bus Station. The investment is offered with virtual freehold as it is held under one of Belfast's typical commercial leases for 10,000 years with a ground rent of five pence per annum.
The ground floor facade is detailed in copper patina and limestone paving slabs with external terracotta rainscreen cladding. It also has solar efficient glazing and facing brickwork to side and back elevations. There are two high-speed 10-person passenger lifts serving all areas. Air conditioning is an optional extra.
The agents say the offer price reflects a net yield of 6.83 per cent when fully let at quoted rents after normal purchase costs of 5.5 per cent. O'Connor Kennedy Turtle points out that the Investment Property Databank (IPD) research indicates total returns on Belfast offices advancing to 17.5 per cent for 1999, which suggests the Belfast office market is outperforming the UK standard by some 6 per cent on the year. IPD also further underlined the continuity of Belfast's long-term record for total returns since 1980. This has outperformed the UK office average by 6.5 per cent per annum. Relatively low volatility of returns is another feature particular to the Belfast office sector highlighted by IPD. Tony O'Kennedy adds: "Investors in Belfast property therefore have not run additional risks in order to secure superior returns."
Insignia Richard Ellis Gunne is close to finalising the sale of two investment opportunities with planning for hotel/licensed developments in key locations in Belfast's two main nightlife areas.
The agent has been quoting £2.75 million for Carlton House at Shaftesbury Square, right in the centre of the Dublin Road/ Botanic Avenue restaurant-and-club area of the city, known as the "Golden Mile" since being rejuvenated in the 1980s.
The building has 22,270 sq ft of accommodation on six storeys and has planning for refurbishment to create a 35-bedroom hotel. It also contains basement parking for 21 cars. The same agent is quoting £750,000 for numbers 4143 Waring Street, which is placed centrally in the Cathedral Quarter rejuvenation area on the north side of the city centre. The Cathedral Quarter is being developed under the Laganside banner as a mixed-use historical and cultural centre based on Dublin's Temple Bar. Several of the city's main licenced trade operators have bought up properties in the past two years and are developing restaurants and pubs.
Number 41-43 Waring Street is a four-storey Victorian building with 4,354 sq ft of space. It has planning permission for a ground floor pub and nightclub on the upper floors.
O'Connor Kennedy Turtle is joint agent with Hamilton Osborne King in the sale of number 24 Linenhall Street, another newly constructed modern office building occupying a prime location within Belfast's city centre office core. Tenants in the Linenhall Street building include First National Bank, New Opportunities Fund and Tim Lewis Recruitment.
The agents report a potential rental level of £117,917 per year. The building is finished in facing brickwork with high aluminium framed windows on each floor. The side elevation incorporates a lightwell, again with high windows, allowing a high level of natural light throughout the entire building. It is heated by a gasfired system throughout.
The total current annual rental income is £68,430 with the agents quoting a total potential rental of £117,917. Offers over £1.75m are invited. Agent Kenneth Crothers Deane & Curry is quoting £40,000 for Maxol House, a 6,500 sq ft 1950s office building at 26 1/2-63 Ormeau Road in south Belfast. The vacant three-storey building is the former headquarters of the Maxol fuel company.
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