Commercial property market high

The Northern Ireland commercial property market recorded its strongest year since 2017 in terms of investment volumes, research by CBRE NI shows.

Thursday, 6th January 2022, 6:00 am
Updated Thursday, 6th January 2022, 8:34 am
Merchant Square

The data reveals that investment activity in 2021 more than doubled year-on-year with almost £290 million invested across 30 transactions.

The most significant deal in 2021 was undoubtedly the sale of Merchant Square in Belfast city centre, which was sold to a Middle Eastern investment fund for £87 million in what is the largest ever office investment deal recorded in NI.

Other notable investments included Balloo Retail Park in Bangor to Supermarket Income REIT for £24.8 million and Shane Retail Park in Belfast, which was sold to DS Properties for £23 million.

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CBRE’s research shows that Offices and Retail were the key investment sectors across 2021, accounting for approximately 43% and 40% respectively of the overall spend.

Industrial and Alternatives made up around 11% and 6% of activity respectively but both sectors are expected to 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 in NI across the year with more than a 38% share, while local investors bought over 33%, PropCos (property companies) over 15% and REITs (real estate investment trusts) around 14%.

Gavin Elliott, senior director at CBRE NI, said that there has been a flight-to-quality and assets with strong underlying value and occupational demand: “NI has an attractive real estate yield advantage when compared with GB and ROI and we expect to see strong investor appetite in NI continue into 2022, largely due to our unique location as a gateway between the UK and EU.

“Traditional core assets such as retail warehousing and well-leased prime offices will continue to attract suitable buyers, but we also expect to see investors targeting the alternative sectors such as build-to-rent, healthcare and logistics or ‘beds, meds and sheds’, which will bode well for NI.”

Brian Lavery, managing director at CBRE NI, added: “The NI commercial property investment market performed consistently well across the year as the economy continues to pick up pace. 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 wider economy. Furthermore, with inflationary pressure being felt throughout the UK economy, investor sentiment for real estate will continue to strengthen.

“It’s clear that there is growing appetite for NI’s commercial real estate from investors across the spectrum. With a raft of reasons to invest – from an exceptional talent pool to a high standard of living – NI provides a strong draw for international companies looking for improved returns and we expect that to continue in 2022.”

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