Northern Ireland real estate investment to breach £300m for FY 2021
Investment in Northern Ireland’s commercial real estate is expected to top £300 million for 2021, according to agents CBRE NI.
The total will be a sharp improvement on last year when the Covid-19 pandemic pared volumes back to just £136 million and shows the rejuvenation of a sector which acts as a bellwether of the Northern Ireland economy.
In its quarterly outlook, CBRE NI said £234 million of investment activity has been recorded so far this year, with another £66 million either under offer or currently on the market.
Indications of activity so far this year also show that the office sector accounted for the bulk (55%) of the recorded deals, a figure which chimes with indications from a number of large corporates which have reiterated the importance of the office in recent months.
The retail sector was the second largest sector by investment volume so far this year, but CBRE NI expect it to come close to being the largest investment sector by the end of the year with interest in retail parks particularly strong.
Industrial and Alternatives accounted for just 10% and 4% respectively of activity but both should increase their market share to help more evenly spread volumes across all sectors in the coming years.
Institutional investors were responsible for buying the bulk of commercial property so far this year with a 51% share, while local investors bought 29%, prop cos (property companies) 18% and owner occupiers 2%. CBRE NI said it expects to see activity increase amongst the latter two investors by the end of the year.
Gavin Elliott, Senior Director, Capital Markets at CBRE NI, said: “The Northern Ireland commercial property investment market has posted another strong quarter of activity as the economy continues to pick up pace and investors return. Over the year we have seen a dramatic increase in investor appetite for properties across all sectors, which has been primarily driven by the low interest rate environment and the continuing improvement in the occupier markets and the wider economy. Furthermore, with inflationary pressure being felt throughout the UK economy, investor sentiment for real estate will continue to strengthen.
“It’s particularly interesting that activity in the office market has been busy, with companies realising the importance of a base for co-operation, collaboration and team building. Similarly, retail has posted a strong quarter and we expect that to continue as interest in retail parks grow.”
Brian Lavery, Managing Director at CBRE NI, said: “It’s clear there is growing appetite for Northern Ireland’s commercial property from investors across the spectrum. With a raft of reasons to invest – from a strong talent pool to a high standard of living – Northern Ireland provides a strong draw for international companies looking for improved returns and we expect that to continue in the months ahead.”
The most notable deals to have completed in the third quarter include the sale of Shane Retail Park in Belfast to DS Properties for £23 million, Danesfort office complex in Belfast to Martin Group for £5.25 million and Fairhill Shopping Centre in Ballymena to Magell for £6.9 million.
For more information, contact:
Matthew Jeffrey – Senior Associate, Lanyon Group
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