Commercial markets are springing back to life
20th May 2021
Irish News Article 10th May 2021
The good news on the vaccine roll-out combined with the easing of lockdown and the gradual return of life to our city centres has in turn brought a revitalised air of optimism to the business community in Northern Ireland.
And this optimism is not just based on sentiment, with the Bank of England now expecting the UK economy to bounce back more positively than previously predicted. It expects GDP to grow by 7.5 per cent in 2021 – its fastest rate since the second world war. The Bank also expects the UK economy to recover to its pre-pandemic level by late 2021 and, importantly, for unemployment levels to hit a much lower peak than previously forecast.
The pandemic has undoubtedly delayed many decisions, and the commercial property world was not immune to this. But like many sectors, we are now seeing evidence of a bounce back with a number of properties coming to the market in recent weeks.
In the retail sector, notable schemes to have come to the market include Fairhill shopping centre and Shane retail park. The much-delayed sale of Fairhill should gain some traction in the market, given its asking price of £10 million and M&S as the anchor tenant. The price tag is less than a quarter of the price it sold for in 2015, which reflects the current sentiment from investors in shopping centres.
Shane retail park on Belfast’s Boucher Road has also come to the market with a price tag of just over £19.5m. Given that retail parks, in general, have performed well throughout the pandemic, we would expect this asset to be well received by buyers.
Evidence of actual transactions in the retail warehouse market is demonstrated by the recent purchase of Lisnagelvin retail park in Derry by David Samuel Properties for £9.7m. David Samuel is now one of the major retail park owners in Northern Ireland with its purchases of Crescent Link in Derry and Holywood Exchange in Belfast for £30m and £18m respectively.
It is not just retail parks which are attracting attention, as there is evidence of confidence in the high street investment market with the sale of the McDonald’s building in Donegall Place.
Evidence of substantial properties coming to the market has not just been restricted to retail, and the sale of the former NIE headquarters, Danesfort Building, is a case in point. The 78,000 sq ft building has effectively been vacated by its former owners and will provide either a refurbishment or redevelopment opportunity on the 2.8 acre site in the heart of leafy south Belfast.
Given the number of properties that have been brought to the market in the last few weeks, we expect the next few months to be a busy time in the commercial property world.
And while we don’t expect every year for the economy to grow at its fastest rate since the second world war, we are ever hopeful the that once the initial bounce back is over that we will see sustained demand from investors, occupiers and the banks.
Declan Flynn, Managing Director