Real estate investment in NI on course to double in 2021 says local CBRE

Commercial real estate agency CBRE NI has said it expects to see much-improved real estate investment spend in Northern Ireland in 2021 – compared to the same period in 2020 – as over £147m of transactions complete in H1.

Tuesday, 6th July 2021, 6:00 am
Merchant Square

Investment activity in Northern Ireland during 2020 was limited due to obvious challenges presented by Covid-19. The yearly investment total was £136m – a decrease of 36% from 2019 – which reflected those challenges.

However, recent research on the volume and value of investment transactions in H1 2021 carried out by CBRE NI shows that investment spend in the first half of the year alone totalled £147m.

Gavin Elliott, senior director, Capital Markets at CBRE NI, said: “Given that we have already secured more than the 2020 investment total in H1 alone, we are expecting that transaction volumes will double by the end of 2021.

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“While real estate on the whole is not immune from wider economic and market forces, as an asset class it continues to offer relatively stable income and capital appreciation, which is attractive to investors at this time, especially given the current low interest rate environment.”

The most significant deal in 2021 so far was undoubtedly the recent sale of Merchant Square in Belfast city centre by Oakland FRO, which was sold to a Middle Eastern investment fund for £87m in what is the largest ever office deal recorded in Northern Ireland. Other notable investments in H1 2021 include Balloo Retail Park in Bangor to Supermarket Income REIT for £24.8m, Lisnagelvin Retail Park in Londonderry for £9.7m and Kilroot Business Park in Carrickfergus to Wallop Estates for £9.35m.

“It is very positive to note the continued new entry of established and international investors to Northern Ireland,” Mr Elliott added. “In particular, Supermarket Income REIT, who made its first Northern Ireland acquisition in Bangor, and the Merchant Square sale are both helping demonstrate that Northern Ireland is still considered as an attractive investment location. This injection of investor confidence in the local real estate sector is fantastic news and we expect similar if not higher transactional volumes in the second half of 2021. The industrial and logistics sector has performed well throughout 2021 so far, and we expect a strong second half of the year.

“The growing requirements for ‘last mile delivery’ hubs, manufacturing space and warehousing will contribute to the expected bounce back in overall investment levels this year.”

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