Demand for Belfast Office Space Remains High
Companies and investors are still interested in prime space in Belfast and jobs are being created as a result according to a report by CBRE.
The H1 2015 Report shows that whilst it wasn’t quite as strong as H2 2014, with just 87,487 sq ft signed for in 22 transactions, the demand for office space in Belfast has remained high and the second half of 2015 is expected to be much stronger.
Highlights for the first half of the year include deals to Rapid 7, PwC, Chain Reaction Cycles, Finepoint Films, Aviva, Loud Mouth Media and Brook Street. Such companies are still creating jobs in Belfast on the back of this investment. Invest NI confirmed it has secured almost £448 million of investment by businesses in the Belfast city Council area and that 5,544 new jobs were promoted in 2014/15.
There was approximately 905,000 sq ft of available accommodation in Belfast at the end of H1 2015. However the amount of Grade A office space is decreasing, with around 220,000 sq ft available – fragmented across multiple buildings, making it difficult to suit larger requirements.
With City Quays 1 completed, there is 28,000 sq ft pre-let and another 15,000 sq ft in solicitors’ hands. With construction of City Quays 2 due to commence in Q3 2015, this will deliver a further 96,000 sq ft of Grade A space in 2017.
David Wright, director, CBRE said:
“Office take-up has been relatively slow in H1 2015 but we continue to see strong demand and we are expecting much stronger take up in the second half of the year. We are also experiencing a pickup of interest from developers as the expectation is rents will achieve in excess of £18 per sq ft in the not too distant future. Rents at this level make development viable and easier to fund for our local office developers.”
“H1 2015 has also seen high profile planning applications submitted. McAleer and Rushe have applied for approximately 200,000 sq ft in Bedford Square over two buildings and Stargime have submitted planning for a new building at Custom House Square. Alongside this, refurbishment of existing space will play an important role in delivering much needed quality stock to the market. Buildings such as Arnott House on Bridge Street, which has been refurbished and partially let to Rapid 7, or the former Ireland Brothers Building on Adelaide Street is currently undergoing refurbishment, will provide Grade A accommodation.”
Brian Lavery, managing director, CBRE Belfast commented:
“Offices are top of the sector list for local, national and foreign investors who are attracted by the high yields and affordable rents in Belfast. However, prolonged Stormont Executive issues to allow a corporation tax cut are turning investors off the idea of NI. Going by Dublin’s success, a cut would be a massive boost to the Belfast office sector so it is extremely disappointing that the earliest this could happen in now 2018.”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 140 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.