CBRE NI: Retail leads 'subdued' 2024 commercial property investment accounting for 56% spend amid challenging year

Commercial property agent CBRE NI has reported that Northern Ireland’s investment sector faced a challenging 2024, with volumes reaching £118 million across 24 transactions, representing a 65% decrease from £338 million invested in 2023.

Despite a subdued overall performance, retail emerged as the clear leading sector, solidifying its position as the dominant investment sector in the region for the third consecutive year.

Retail accounted for 56% of the total investment spend with the industrial sector emerging as the second most active area, capturing 17%, while the alternative sector constituted 14% of the overall investment spend.

Significant deals completed throughout the year included the sale of Bloomfield Shopping and Retail Park in Bangor for £22.7 million and the Etap Hotel on Dublin Road in Belfast for £7.35 million, while Central Park in Mallusk and Murray’s Exchange in Belfast both sold at undisclosed prices. All these investments were acquired by private investors based in Northern Ireland or the Republic of Ireland.

Gavin Elliott, senior director at CBRE NI, explained: “The investment market in Northern Ireland experienced a significant downturn in 2024 when compared to the previous year. This subdued activity can be attributed to several significant external factors, including persistently high borrowing costs and political uncertainty surrounding government elections in both the UK and the US, as well as the implications of the UK budget announced last October.

“A particularly striking observation this year has been the decline in the volume of investments introduced to the market, totalling only £123 million during 2024, which is in stark contrast to the £340 million marketed during 2023. With fluctuating asset values and a lack of pricing benchmarks, investors have shown reluctance to list properties for sale.”

Despite this, the demand for commercial real estate in Northern Ireland remained strong among local investors across various sectors throughout the year. Domestic investors accounted for the majority of commercial property acquisitions, holding more than a 70% share, while institutional investors and pension funds represented over 18%.

Gavin added: “While 2024 has presented its challenges, there are indications of a more resilient market in 2025. We anticipate stronger investor sentiment, with a gradual improvement throughout the year. However, investors are likely to remain sensitive to pricing and sector dynamics due to ongoing economic and geopolitical uncertainties.

“With analysts predicting further reductions in the base rate, this is likely to create more favourable conditions for commercial real estate investment in 2025.”

For more information on Northern Ireland’s commercial property market, visit www.cbreni.com.