Posted on Thursday 7 May 2015 by Ulster Business
Activity in the Northern Ireland commercial property market has picked up pace in the first quarter of the year as investors loosen their grip on the purse strings, according to CBRE.
Its latest Bi-Monthly Research Report recorded nine investment transactions in the three months to the end of March totalling £58.6m, a sharp jump from £5.02m reported last year.
CBRE said interest has emerged from all aspects of the commercial property market, most notably from the investment community.
Major deals include the acquisition by Threadneedle of B&Q, Faustina Retail Park, Derry for £18m; the acquisition by government of Causeway Exchange office building, Bedford Street, Belfast for £12.15m and the sale to The Nepture Group of Linen Green Shopping Centre in Dungannon, Co. Tyrone .
And the retail sector has experienced an increase in tenant demand across Northern Ireland , as has the hotel sector which the agents said has been boosted by the Irish Open and Tall Ships.
Brian Lavery, managing director, CBRE NI said confidence has continued to improve in the early part of 2015.
“We expect to see more office investment properties coming to the market over the coming months with an increasing number likely to trade off-market,” he said.
“Prime yields for the most part remain stable although there is potential for office yields to contract further over the summer months as new market evidence materialises and further rental growth emerges. As a result there has been a notable increase in demand from local investors in recent months, particularly for lot sizes of up to £10 million.”
Meanwhile, the announcement that Invest NI is looking at the feasibility of providing funding to support the development of Grade A offices in Belfast has been welcomed, especially given expected boost to demand for such space.
“However, corporation tax remains the key driver to solve this issue, with the potential to take effect from 2017 – we expect to see developers moving shortly to create sufficient accommodation for the larger, multi-national firms.”