Notwithstanding the uncertain political climate investment transactions so far this year have reached £101m, the Lisney Q2 2019 Northern Ireland Commercial Property Report has revealed.

Quarter two performance was better than anticipated with a total of £60m of commercial property investments transacted in Q2 compared to £55m within the second quarter of 2018.

Declan Flynn, Managing Director of Lisney Northern Ireland, which specialises in office, retail, leisure and industrial property acquisition, disposal and investment, commented:

“We’re continuing to see healthy levels of local activity at smaller lot sizes with pricing remaining resilient. That said the appetite of external investors is undoubtedly hampered in the current climate.

“This is understandable as the capital markets reflect the risk associated with Brexit. The retail sector continues to be a major talking point as the sector remains in the midst of a correction, given how our volumes have been traditionally dominated by retail this is particularly pertinent for the NI commercial property market.”

Additional headline findings from Lisney’s most recent Commercial Property Report revealed that:

• Notable investment transactions include Citi buying their own offices in Titanic Quarter for £34m, Antrim Business Park for £12.5m and Timber Quay in Derry for £5,25m
• Over £45m of investments are presently ‘On The Market’ in Q2 including Great Northern Tower and The Boat in Belfast along with Clandeboye Retail Park in Bangor.
• The biggest industrial letting of the year, so far, transacted at 113,550 sq ft at 36B Lisdoart Road, Ballygawley.
• In the industrial sector, concerns remain about the future of Harland & Wolff.
• 75,171 sq ft of office take-up was reported in Q2 with the largest notable transaction PWC’s decision to take a further 46,000 sq ft beyond their original acquisition of 155,000 sq ft to secure the entirety of Merchant Square in Belfast.
• The continuing shortage of Grade A office space within Belfast City Centre continues to be a challenge for the market until new stock is built and comes online later in 2019 and early 2020
• Q2 saw a boost to the city centre as Primark opened what is now their second city centre store at the 27,000 sqft Fountain House, Donegal Place formerly occupied by New Look.
• Primark also expanded its footprint outside Belfast City Centre opening an upsized store at The Abbey Centre in Newtownabbey.

Mr Flynn said:

“A drop in the office take-up figures assessed within Belfast’s CBD for Q2 2019 is a reflection of the shortage of Grade A stock rather than a slackening of activity.

“Activity will continue to be a challenge for the market until new stock is built and comes online later in 2019 and early 2020.

“The trend of Tech and Digital sector domination continues to be a real positive for the Belfast market and as revealed in new research released by the government’s Digital Economy Council – Belfast is in the top four locations for high-paying digital jobs within the UK and with over 16,000 new posts created in the past 12 months.”

Of the retail sector, Mr Flynn explained:

“Q2 saw yet another high profile casualty. Arcadia Group whose brands include the likes of; Topshop, Burton and Dorothy Perkins hit the headlines as they announced CVA proposals.

“However, as we observed with House Fraser’s CVA, this was met with considerable opposition from some of the UK’s leading landlords, before eventually gaining approval. In a similar suit, Monsoon Accessorize has proposed a CVA which like Arcadia’s, has and continues to be subject to significant landlord scrutiny.

“At a Northern Ireland level, Belfast City Centre continues to be amongst the headlines as it attempts to recover from the chaos caused by the Primark fire. With works to secure the Bank Buildings structure progressing the protective cordon has been scaled back, allowing the welcomed reopening of Zara and Tesco Metro.

“Activity within the industrial/logistics sector in Quarter 2 was relatively quiet in the industrial market in terms of the number of deals transacting, however, the average size of each letting is considerably larger than in previous quarters.

“In Q2 Lisney transacted the largest letting of the year, so far, at 113,550 sqft in Ballygawley and this deal continued the theme of storage and distribution demand for high-quality units with dock levellers seen over the last 6+ months.”

Lisney’s latest report on the Northern Ireland commercial property market can be viewed in full here:

https://lisney.com/belfast/research-and-report/