Office market posts strong start alongside economic output

Compare NI has taken space in the Adelaide Exchange building
Compare NI has taken space in the Adelaide Exchange building

Demand for office space in Northern Ireland has enjoyed its strongest ever start to the year with the highlight so far the move by US insurance giant Allstate into its new headquarters on the old Maysfield Leisure Centre site in Belfast.

The figures come from the Office Market Report site for Q1 2018 from real estate agents CBRE.

The report indicates take-up of 270,310square feet across 23 reported transactions with Allstate accounting for a large portion of that figure.

However, the firm said there had a been a number of other significant deals, including contact centre HCL’s take up of additional space at Millennium House in the city, Compare NI’s take up of a floor at Adelaide Exchange and Secure Broadcast leasing space on Callender Street.

“Interest in good quality, city centre offices remains strong with a large number of requirements currently in circulation,” said David Wright, CBRE’s director of advisory and transaction services.

“There are no new-build office schemes due to be completed in 2018 and, therefore, the market will continue rely on refurbished stock to meet demand.

“The next large-scale refurbishment to be completed will be River House on High Street in Q2 2018. Flexible office provider ‘Clockwise’ is already signed up to the scheme with a further eight floors available to lease.”

In other developments, the developers of Merchant Square are now on-site and have started the strip-out of the 212,000 sq ft property which is scheduled for completion in early 2019.

Meanwhile, an application for the first phase of the £400m Belfast Waterside project at the former Sirocco Works has been submitted and comprises of a 250,000 sq ft office building.

“We also expect Q2 to record strong take up given the number of deals going through the legal process,” added Mr Wright.

The CBRE report comes as figures from the Northern Ireland Statistics & Research Agency (NISRA) show that the last quarter of 2017 saw output in the services sector increased in real terms by 0.2% in Q4, with output at the highest point since Q3 2008.

Production sector output increased in real terms by 0.9% over the quarter but saw another sharp contraction in output over the year mostly due to a large fall in the sub sector of Food, Beverages and Tobacco.