The Belfast office market offers some of the highest rates of return for global investors compared to cities across the UK and European Union, according to the Northern Ireland Commercial Property Investment Review 2018.
The influential report, prepared by MSCI Real Estate with Ulster University, revealed that Belfast tops London, Manchester and Cardiff in terms of total returns from investment in offices.
Belfast returns reached 12.4% in 2018 - pipped only by Brighton and Hove and Edinburgh and well ahead of the average total return for European cities of 8.1%. This was underpinned by an income return of 7.8%. The report also highlights a market rental growth for offices in NI of 6.7% - the highest in least a decade.
MSCI also reports an income return of 7% across the wider NI commercial property sector, outperforming Scotland (5.5%), Wales (5.8%) and England excluding London (5.0%). It highlights that Northern Ireland’s superior income return relative to other markets across Europe continues to make it an attractively-priced commercial property investment destination for new investors.
The report indicates a challenging UK-wide retail market but also highlights that the comparatively high income return in the Belfast market continues to make it attractive for investors.
“It’s very encouraging to see just how strong performance is in the office investment sector in particular,” said Belfast City Council CEO Suzanne Wylie.
“Whilst it’s recognised that the retail sector in Belfast and across the UK continues to face challenges, I’m also encouraged that the report highlights how the Belfast market’s comparatively high income return continues to make it attractive for investors seeking strong tenant profiles and stable income.”