Posted on Wednesday 4 February 2015 by Ulster Business
Owners of Belfast’s commercial property are enjoying the best return on investment for 32 years, according to a new independent report.
The city is second only to Dublin in terms of income return and outperforms the likes of London, Paris and Copenhagen, according to the report carried out by Ulster University in partnership with Investment Property Databank.
Income return for Belfast stood at 8.5% year-on-year in 2013, just below Dublin at 9.3% but well above the average across Europe of 5.4%
Such a strong level, combined with the makeup of tenants, makes Belfast a must-have for buyers, the report said.
“The high level of income return in the Belfast market makes it highly competitive to new investors looking at buying, particularly given that tenant risk is largely similar to the rest of the UK reflecting the pre-dominance of retailer multiples.”
The favourable income return has been helped by a sharp fall in capital values of commercial value across Northern Ireland of 33% since 2013 combined with strong levels of “passing rent”.
The report said it means assets are discounted but with the benefit of highly competitive income streams.
Dr Martin Haran, lead researcher from Ulster University, said the ability to benchmark Belfast is important for investors.
“To be able to benchmark Belfast relative to other cities across Europe on a like-for-like basis is critical in the modern investment climate,” he said.
“This research affords us that opportunity and the messages are very positive. The research provides clear evidence of the investment potential of the Northern Ireland property market to the international investment community, providing key performance indicators which serve as the basis for investment decision-making.”