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Brexit 'caused 40% hit to commercial property deals in Northern Ireland'

By Margaret Canning

Brexit contributed to a 40% slump in investment commercial property deals in Northern Ireland from £400m to £248m during 2016, it’s been claimed.

Commercial property agency CBRE said the “notable reduction” in investment volumes compared to 2015 was down to turmoil following the vote to leave the EU, and to a decrease in the value of investment opportunities. 

But CBRE said it anticipated a return to growth during 2017, despite the “political uncertainty” ahead.

The agency said 2016 had seen 36 investment transactions worth a total of £248m — down from £400m a year before. 

Institutional investors — such as pension funds — were largely absent from the market, with private equity groups, wealthy individuals and property companies acquiring assets instead.

One of the biggest deals of the year had been the sale of Damolly Retail Park to MJM Group in Newry for over £30m.  

In addition, retail tycoon Sam Morrison, former owner of Fairhill Shopping Centre in Ballymena, acquired Tower Centre after it went on the market in May 2016 for £6m.

Gavin Elliott, CBRE director of capital markets, said it expected appetite for commercial property would be “buoyant”. “We are anticipating a number of major investment transactions that were stalled by the radical events of 2016 to complete in early 2017.

“The investment market in Northern Ireland will see healthy interest from a broad spectrum of investors including private equity, property companies, high net-worth individuals and institutional investors.”

The market was now in a period of “political uncertainty” with investors likely to focus on core income and strong investment fundamentals.

“However, we believe that commercial real estate will continue to be favoured and viewed as a safe-haven in comparison to other asset classes,” he added.

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