Commercial property

Investors Continue to Seek Value in NI’s Commercial Real Estate Market

According to CBRE NI’s Quarterly Real Estate Research report, activity in the Northern Ireland commercial property market was intense in the second quarter of the year as investors searched for value and investment opportunities in term, preparing the market for a busy second half.

It recorded £44m in transactions in the three months to the end of June 2022, an increase of £21m on the same period last year.

The most notable deals completed in the second quarter include the sale of Ross’s Court for £5.7million and Marlborough House for an undisclosed price (both located in Belfast) to Martin Property Group. Additionally, Killymeal House in Belfast sold for £6.1million.

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Ross Court, Belfast

At the end of the second quarter, the largest investment sector so far this year has been retail, followed by the office sector, accounting for 63% and 30% of total investment spending, respectively.

CBRE NI Managing Director Brian Lavery said: “Despite a number of headwinds, the commercial property market in Northern Ireland has been busy over the past three months. The second half of the year will certainly be interesting, but the commercial real estate market may continue to be an indication of the recovery of investment and professional interest in what has always been a resilient sector.

“Commercial property is often used as an inflation hedge, which will provide a boost to the investment market as inflationary pressures continue to rise in the UK and Ireland.

“This is evidenced by the activity of the investment market in Northern Ireland and indeed by the preparations for the sale of several significant assets which will come to market in the third quarter.”

CBRE NI said the third quarter of 2022 is expected to be particularly busy for the investment market with over £40m of properties up for sale and being finalized, as well as over £115m in market readiness course.

Meanwhile, office, retail, industrial and hotel rentals remained active in the second quarter of 2022, although inflationary pressures that benefited the investment market rattled sentiment. occupiers, as well as geopolitical uncertainty around Ukraine and the Northern Ireland protocol.

In the office market, Belfast city center recorded occupancy of 77,610 square feet, an increase of 214% on the first quarter of the year, bringing the figure since the start of the year at 102,289 square feet. Participation is still below the five-year rolling average, but the recent announcement of the removal of the need to work from home wherever possible should help companies shape their real estate strategies, with the majority looking to implement a hybrid strategy between home and office. -work based.

Demand for industrial and logistics space remains strong, with the lack of accommodation tempering activity. Countering this demand is the start of speculative development of warehouse space, such as in Duncrue Street, Belfast, where around 100,000 square feet of space are due for completion in August/September 2022.

In retail, the second quarter continued to see new openings, although inflation and labor costs led to a number of announced closures, particularly for local food retailers and drinks. The retail warehouse sector continues to remain resilient, with discount retailers such as Home Bargains, B&M and Poundland seeking new store opportunities.

The report also indicates that the Northern Ireland hotel market is in a state of confidence as it enters the traditionally busy summer period. Leisure demand increased month-on-month in 2022, benefiting from the return of some international visitors in recent weeks as well as business travellers. Large-scale events have also started and are expected to return to more normal levels as the year progresses.