More prime commercial real estate needed to satisfy potential buyers in some sectors
Marie Hunt – 00 353 1 6185543 / 00 353 87 2727115 or firstname.lastname@example.org
Brian Lavery 028 9043 6741 / 07901 850 136 or email@example.com
Belfast, 1st May 2013 – Commercial property consultants CBRE today released their May bi-monthly report, focussing on current trends in all sectors of the Northern Ireland commercial property market. The property consultants say that there is a lack of prime properties for sale to cater for the current volume of demand in many sectors. The CBRE report also contrasts conflicting market conditions between Northern Ireland and the Republic, with transaction volumes extremely low in the province during the first few months of 2013 in contrast to two consecutive quarters of strong transaction volumes in the Republic and improving prices in the Dublin market over recent months.
- There is a marked contrast between the increased volume of transactional activity and improving market conditions in many sectors of the commercial property market in the Republic over recent months and the comparatively depressed conditions in the Northern Ireland property market. Although investor appetite remains relatively robust, the lack of prime properties being offered for sale to satisfy this demand has stymied transaction volumes with no investment transactions over £1 million in value recorded in Northern Ireland in the first few months of 2013.
- There has been a lot of interest in the Scottish Mutual office building in Belfast, which was launched for sale in recent months, with a range of different interested parties including hotel operators and local investors bidding higher than the asking price of £1.75 million. Similarly, the Linen Green investment in Dungannon, which has recently come onto the market, has already generated more than twenty expressions of interest. There is therefore a clear need to release more assets for sale in this market to capitalise on the volume of investor interest for good opportunities.
- Activity remains weak in the occupier markets with many office occupiers opting to remain in serviced accommodation which is impacting on take-up volumes.
- Limited activity in NI's retail sector with no notable new entrants over recent months although there has been a slight improvement in Belfast high street vacancy rates over the last 6 months.
- Retail occupancy in regional centres, has been primarily driven by local tenants attracted by rebased rental values and the ability to negotiate flexible lease terms.
- The five Target Express logistics facilities, currently on the market, are generating strong interest with local companies being the most dominant potential purchasers.
- A number of small hotels in the region have sold recently and this month sees the re-launch of the 5 star Lough Erne Hotel & Golf Resort in Enniskillen, guiding £10 million.
- The volume of properties that are released for sale across Northern Ireland over the next two month period will ultimately dictate the outturn for the year considering the length of time it is taking to conclude transactions at present.
- The news that a decision to enable Northern Ireland to set its own rate of corporate tax has now officially been put on hold until after the Scottish Independence elections in September 2014 has been met with widespread disappointment considering the impact this decision will potentially have for the local economy and its property market.
According to Brian Lavery, Managing Director at CBRE, Belfast “The last few months has seen muted activity in most sectors of the Northern Ireland commercial property market although demand is strongest for prime properties in Belfast, with a clear divergence in performance and transaction volumes between prime and secondary assets. A theme that is coming through from several sectors of the market, but particularly investment and hotels, is the lack of prime property being released for sale to satisfy the current volume of demand. This trend is also evident in the Northern Ireland market. Although the Northern Ireland property market remains quite depressed, relative to the Republic, there is international demand for prime investment properties but there are very few assets actually being offered for sale, which is frustrating would-be purchasers”.
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 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 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 110 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