Belfast,
01
May
2015
|
11:54
Europe/Amsterdam

NI Commercial Property Market Set for Busy Summer

There were nine investment transactions totalling approximately £58.6 million completed in Q1 2015 in Northern Ireland, according to CBRE’s Bi-Monthly Research Report.

Taking an overall look at the commercial property market in NI, the report has highlighted the continued activity throughout the early stages of 2015 across all sectors and particularly investment, with several notable transactions currently in negotiations and close to being agreed.

Recent investment transactions have included Threadneedle’s acquisition of B&Q in Derry/Londonderry for £18 million; the Government acquisition of Causeway Exchange office building in Bedford Street for £12.15 million; and the sale of the Linen Green shopping centre in Dungannon to the Neptune Group.

According to the report, activity in the retail sector has continued to improve, with regional locations in addition to Belfast, reporting on improvement in tenant demand. The hotel sector has strengthened – boosted by events such as the Irish Open in County Down and Tall Ships in Belfast.

On the non-commercial side; whilst very few development sites for residential property are offered for sale, demand has increased significantly. The Belvoir Park development recently saw many interested parties queuing to have their choice of site.

Brian Lavery, Managing Director, CBRE NI
The research report has confirmed our confidence that the market has seen a further upturn in 2015. We expect to see more office investment properties coming to the market over the coming months with an increasing number likely to trade off-market.

Prime yields for the most part remain stable although there is potential for office yields to contract further over the summer months as new market evidence materialises and further rental growth emerges. As a result there has been a notable increase in demand from local investors in recent months, particularly for lot sizes of up to £10 million.

Whilst rising demand is a positive for the market, there is still a notable concern, particularly in the lack of Grade A office space to suit the FDI demand. The largest office lettings in 2015 so far are 21,000 sq ft to PwC at Waterfront Plaza and 11,000 sq ft to Rapid7 at Arnott House.

 The news that Invest NI is intending to provide mezzanine funding to support the development of Grade A space has been broadly welcomed. However, corporation tax remains the key driver to solve this issue, with the potential to take effect from 2017 – we expect to see developers moving shortly to create sufficient accommodation for the larger, multi-national firms.

 
Brian Lavery, Managing Director, CBRE NI
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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.