Industry sector gets its moment in sun as demand soars
When we see analysis of the Northern Ireland commercial property market, it's generally the office and retail sectors that get the attention. The space used for logistics, manufacturing and warehousing could perhaps be considered the less glamorous, forgotten child.
But the so-called industrial sector is definitely worth a closer look, and has shown a high degree of resilience. There is real demand for space at present, from indigenous manufacturing businesses.
The Mid-Ulster area is especially strong in the construction of heavy engineering, notably quarrying equipment. We recently marketed a substantial factory in the Benburb area and enjoyed competitive bidding from three manufacturing firms. This gives some indication of the demand.
We also advised JTI Gallaher's on the disposal of their Ballymena factory to Wrightbus. In greater Belfast, the main sector hubs are the Mallusk, Foreshore, Boucher and Castlereagh areas, where land availability permitted the development of more modern industrial estates. These areas are now largely developed out.
Indeed, there is a distinct lack of industrial land and speculative development at present, resulting in a constrained volume of stock.
The vibrancy of the sector has caught the attention of the investment market, with one Mallusk warehouse recently selling for a yield in the region of 7.5%.
Looking ahead, the exchange rate will influence the market. Many of our manufacturing exporters are enjoying additional competitiveness in international markets thanks to the weak sterling, which also makes UK-based assets more attractive to international investors. With these and other tailwinds, perhaps Northern Ireland's industrial property sector will shed its ugly sister persona.
- Brian Turtle MRICS is a member of the Royal Institution of Chartered Surveyors and a partner at commercial property agency O'Connor Kennedy Turtle