Northern Ireland’s hotel sector continued its strong performance throughout the second quarter of 2024, with the highest ever average daily rate (ADR) and revenue per available room (RevPAR) recorded in June.

CBRE Northern Ireland has reported that during the first six months of the year, occupancy and ADR surpassed 2023 levels, with RevPAR up by over 11% when compared to the same period in 2023.

CBRE’s latest Quarterly Research Report also revealed that take-up of office space in the second quarter of 2024 was recorded at 69,473 sq ft, bringing the half-yearly total to 169,404.

This represents a 13% increase on the same period in 2023, and a 52% increase on the first six months of last year, marking the strongest half year since 2022.

It was a mixed quarter for retail, while in logistics, a lack of supply appears to have had a knock-on effect on the volume of new enquiries.

Steady interest in freehold properties appears to have been driven by capital values compared to the cost of building a new property.

Commenting on the report, Brian Lavery, Managing Director, CBRE NI, said:

“The rise in demand within Northern Ireland’s hotel sector continues to be a positive trend in 2024, demonstrating the region’s growing appeal as a destination. With MHL Hotel Collection, Andras House and Press Up announcing significant investment plans, it is anticipated that industry-wide growth will continue throughout the remainder of the year and beyond.

“Office space take-up figures for the first half of the year remain strong, and we expect this momentum will carry into the coming months. It is notable that there appears to be no obvious explanation for why deal completion timescales are currently considerably longer than normal.

“We have seen a slowdown in leasing activity throughout the quarter, however, the lack of additional retail insolvencies is encouraging. As interest in retail parks, warehouse retail and city centre locations expands, there exists a real demand for suitable accommodation.”

Further key findings of the report include:

• A total of 18 deals were completed in the second quarter of the year, with an average deal size of 3,859 sq ft. There were no deals signed that were more than 10,000 sq ft.
• Properties which came to the market in Northern Ireland during the quarter include: DHL, Mallusk (quoting £5.14 million), 11-13 Market Street, Omagh (quoting £4.885 million), 21-23 Arthur Street, Belfast (quoting £2.5 million), and 180-186 Lisburn Road, Belfast (quoting £1.8 million).
• The largest investment sector so far this year has been retail, representing nearly 55% the total investment spend, followed by industrial at 19%, and alternatives at 13%.
• Domestic Northern Ireland investors continue to be the largest investors within the market, representing 73% of the total investment spend over the first half of 2024.
• Irish hotel group MHL Hotel Collection completed its first purchase in Northern Ireland in April, acquiring the former Park Inn Hotel in Belfast city centre. MHL announced it would undertake a £7 million refurbishment and rebrand the hotel as a Moxy by Marriott in 2025.

Mr Lavery continued:

“Investment activity throughout 2024’s second quarter has been modest, with the total figure standing at £83.5 million to date. Based on the half-year total for 2023, this indicates a 48% decrease in spending.

“It is hoped however, that the European Central Bank’s decision to cut rates by 25 basis points at the beginning of June, combined with a fall in inflation, improved investor sentiment, policy commitments from the incoming Labour government and new ministers at Stormont will result in an uplift in activity later in the year.

“This predicted rise in investment should result in benefits for the retail and logistics sectors. As we progress into the second half of 2024, we remain cautiously optimistic and continue to closely monitor market trends.”