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North’s commercial property market reports healthy start to 2019 and further positivity ahead

THE north’s commercial property sector enjoyed a positive start to 2019, according to the latest market research.

The new report from Lambert Smith Hampton, which covers the first three months of the year, shows the total investment volume of £42.5 million was almost three times higher than the same period a year ago (£17m). However, that figure is 47 per cent below the five-year quarterly average.

The latest Investment Transactions Northern Ireland Bulletin is a continuation of consistent investment witnessed over the last year, but the total of five transactions last quarter is the lowest in five years.

The deals struck in the first three months of year were largely dominated by the office sector, with the largest transaction at the start of 2019 a local government department’s £16m purchase of James House at the Gasworks in Belfast.

Other notable transactions included the £9.6m sale of Donegall House to a private investor group, as well as retail operator Henderson Group’s £7.6m acquisition of a portfolio of petrol filling stations, which they already occupied as tenant

While there were a flurry of large retail transactions at the end of the year, retail was notably absent at the beginning of 2019.

Looking ahead a significant pickup is forecast in the second quarter of the year, with 21 deals either completed or agreed, totalling approximately £75m.

Lambert Smith Hampton director of capital markets, Martin McCloy said the local market continues to be impeded by ongoing political uncertainty.

“It is generally accepted that the six-month extension to the EU/UK withdrawal date and preventing the UK crashing out of the EU in a ‘no-deal’ scenario was the best outcome at the end of the March for the UK and Northern Ireland. However, there is no doubt that the continuation of this period of uncertainty will continue to frustrate the investment market,” he said.

Since the EU referendum in 2016 there has been a steady decline in investment activity in Northern Ireland, with the quarterly average

of the ten quarters pre-referendum (£101m) more than a third less more than the average during the same period post-referendum (£63m)

Coupled with the lack of a Northern Ireland Executive it has led to a ‘wait-and-see’ attitude, which has created a lack of supply to the market. That being said good quality assets remain in demand, according to Mr McCloy.

“Properties with solid fundamentals will remain attractive to investors. A recent report by MSCI reported that Belfast was among the top performing UK office investment markets in 2018. Coupled with the strong office occupier market, we expect that in 2019 office investment will become the predominant asset class in Northern Ireland, over taking retail,” he added.

By Gareth McKeown

Source: Irish News

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North’s commercial property market to end 2018 in strong position

THE north’s commercial property market is set to finish the year in a strong position, according to a new report.

The latest CBRE Marketview, covering the three months to the end of September, shows solid progress, building upon record levels of take-up in the first half of 2018.

The office market added a further 105,337 sq ft across 17 transactions in the third quarter of the year, bringing the yearly total to date to 643,983 sq ft.

The investment sector has also been busy, with total spend to date this year £122.2m, boosted by the completion of a number of high-profile office buildings, including the likes of Artola House, Moneda House and River House.

CBRE office agency director, David Wright believes refurbished office properties have given a “much-needed lifeline” to the market over the last three years, given the lack of new build activity.

“There are a large number of office deals agreed and currently in ‘legals’, and providing they complete in Q4, Belfast is set to experience one of the most active years ever recorded in this sector,” he said.

Despite the positives, political uncertainties remain a concern, according to CBRE managing director, Brian Lavery.

“Lack of local government and Brexit are impacting upon pricing, but it is clear that investor appetite in Northern Ireland remains encouraging from both locals and new institutional entrants.”

“We expect the final quarter of 2018 to be a particularly busy period, which should lead to investment volumes for the full year mirroring last year’s figures,” he added

The report acknowledges the impact of the August 28 Primark fire on the Belfast retail sector, but state that the market has held up reasonably well, with activity now increasing ahead of the key Christmas trading period.

Source: Irish News