Lisney records 91,500 sq ft in additional office occupation, with notable investment deals worth almost £60 million still on the market

The take-up of office space in Belfast more than doubled in the third quarter of the year to 91,577 sq ft, leading commercial property agent Lisney has announced.

The figure was revealed as Lisney published the findings of its research into the commercial property market in the three months to September, with the agent reflecting on a “more functional occupier market”.

The report recorded investment transactions totalling £199 million during the period, placing the market well on course to meet Lisney’s forecast of more than £300m of activity throughout the year with notable properties still on the market including Longwood Retail Park in Newtownabbey priced at £47.78m.

The figure was boosted significantly by the £123m purchase of CastleCourt by Holywood-based property firm Wirefox, in what Lisney said was otherwise a “subdued retail investment market”.

Elsewhere in the retail sector, most activity happened outside Belfast city centre and in the regions, buoyed by coffee operators such as Caffe Nero, which saw new transactions on the Ormeau Road and in Newcastle.

Headline findings from the report reveal that:

• Investment volumes during the third quarter of 2017 jumped to £199m, with several notable properties still on the market including Longwood Retail Park in Newtownabbey priced at £47.78m.
• The take-up of office space was 91,557 sq ft during the period with a healthy spread of take-up ranging from 1,000 sq ft to 25,000 sq ft.
• The supply of units in prime retail locations is drying up.
• Notable transactions in the industrial sector in the third quarter amounted to 263,788 sq ft and included the former Denny’s site in Portadown.

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

“Investment levels jumped significantly in the third quarter of the year, following a very quiet start to 2017.

“Our prediction of investment volumes hitting £300m is on course, with a number of transactions including Riverside Retail Park in Coleraine set to complete before year end. Indeed, with Longwood Retail Park in Newtownabbey currently on the market, we could potentially surpass that estimate.

“One notable sector where we can point to a very strong performance is in the sub-£2m bracket. Anecdotally, many purchasers are utilising the tax benefits of SIPPs (Self-Invested Personal Pensions) and SSASs (Small Self-Administered Schemes) and are keen to deploy capital given uncertainty in the equity markets.”

Examining the performance of the local office, retail and industrial property markets in the third quarter of 2017, Mr Flynn added:

“Office deals completed showed a mix of both indigenous occupiers and new market entrants taking space, which is an encouraging indicator of market resilience given the ongoing political uncertainty.

“However, levels across the year will be less than the long-term average of between 300,000 and 400,000 sq ft annually.

“Belfast’s reputation as a hotbed of activity in the tech and digital sectors continues to gain momentum and the quarter saw Causeway Asset Management launch Chichester House as the city’s first property to seek a WiredScore certification.

“In retail, we anticipate a busy start to the fourth quarter with retailers pushing to finalise acquisitions and openings prior to Christmas.

“However, supply in key areas will continue to hamper progress, most notably in Belfast city centre and in the major border towns where we expect to see the euro spend surpass 2016 levels.

“Demand in the industrial sector is expected to come from export-focused manufacturers, reflecting the fall in the value of sterling.

“This is despite negativity in the market due to ongoing uncertainty around Brexit and local political impasse.”

Lisney’s latest report on the Northern Ireland commercial property market can be viewed in full here: https://lisney.com/advisory-valuations-and-research/.