Global law firm Baker & McKenzie's Belfast arrival brings renewed optimism
A top firm's letting of a new Belfast office building has prompted hopes of a new wave of construction work for 2015 to end the current shortfall in premium office space in the city.
The world's largest law firm, Baker & McKenzie, which announced in August it was opening a new global services centre in Belfast, will be the first tenant for the new City Quays 1 scheme at Belfast Harbour - where bosses say they are engaged with other potential big-name tenants.
The company has pre-let two floors in City Quays totalling 28,000sq ft to accommodate the new centre, which will create 260 jobs. Work on the five-storey block is due to complete in early 2015 with occupation anticipated by mid-April.
Belfast Harbour says it is also in discussion with a number of other parties over the remaining 41,000sq ft at City Quays 1 and a further 124,000sq ft at City Quays 2 which is due for completion in 2016.
The wider £250m, 20-acre City Quays scheme will provide 820,000sq ft of office accommodation, plus residential and retail provision and a hotel, and will employ 600 people during the construction phase.
With rival law firm Allen & Overy taking over almost all of the office accommodation at its Donegall Quay base since coming to Northern Ireland in 2011, and banking group Citi announcing last week that it is to occupy the remaining two floors of the nearby Gateway building it first moved into back in 2004, hopes are high of further expansion.
David Wright, director at commercial property agent CBRE, which negotiated the City Quays letting, said that there had been a resurgence in the office market.
Over 200,000sq ft of offices were leased up to the end of September, with more than half of this activity occurring in the third quarter of the year alone.
Office rents in the city were up to £156 per sq m (£14.50 per sq ft).
"The Belfast office market is having a very strong second half to the year with 117,000 sq ft leased in the third quarter of 2014 and similar take-up levels expected for the last three months of the year," said Mr Wright.
"A lot of the demand is coming from foreign direct investment companies and large corporate organisations who are expanding operations in Belfast.
"The number of requirements in circulation combined with rental growth this year means that we will hopefully see more cranes over the city during the course of 2015."
John Armstrong, managing director of the Construction Employers Federation (CEF), said that even though construction output in Northern Ireland hit a new low in 2014 there remains a cautious hope that 2015 will bring better times.
"As demand for office space in Belfast increases there is a reasonable expectation this will lead to a number of new office developments in the city over the next few years," he said.
"The sooner we can get construction back on the path to growth the better for the whole economy."
Belfast Harbour's property director, Graeme Johnston, said that securing a tenant of the calibre of Baker & McKenzie is a major achievement.
"Belfast Harbour is working closely with Invest NI and we are pursuing a number of inward investors and indigenous firms which have expressed an interest in City Quays," he said.
Baker & McKenzie's Belfast operation will be its second global services centre after the Philippine capital, Manila.