Office rentals hit by Cameron's tax snub
Activity in Northern Ireland's commercial property market is lagging far behind the Republic, according to research.
CBRE's bi-monthly update said just 3,000m2 of offices were taken up in Belfast in the first quarter of this year, compared to 40,000m2 in Dublin.
The postponement of a decision on corporation tax by Prime Minister David Cameron until after the Scottish independence referendum had depressed the market – but there was some activity round the corner, the property agents said.
Modernist office building the Soloist in Lanyon Place, Belfast, is being finished off by contractor H&J Martin so that new tenants including solicitors Pinsent Masons and Aepona, a Belfast IT company which has recently been bought by Intel, can move in. That would add over 4,000m2 to the city's office space. Brian Lavery, managing director at CBRE in Belfast, said: "The last few months has seen muted activity in most sectors of the Northern Ireland commercial property market although demand is strongest for prime properties in Belfast, with a clear divergence in performance and transaction volumes between prime and secondary assets."
Supply was not meeting demand on either side of the border, particularly for investment properties and hotels.
Mr Lavery said: "Although the Northern Ireland property market remains quite depressed, relative to the Republic, there is international demand for prime investment properties but there are very few assets actually being offered for sale, which is frustrating would-be purchasers."
There had been no transactions of over £1m in value in Northern Ireland in the first few months of the year, CBRE said.
But the agency said the high number of offers – some from hotel operators and investors – received above the £1.75m asking price for the city's Scottish Mutual Building were evidence of investor appetite.
The Linen Green designer shopping village in Dungannon, Co Tyrone – along with the Scottish Mutual Building, a former part of the Jermon portfolio of companies – is also on the market through CBRE.
The agents said that asset, which has an asking price of £5m, had elicited more than 20 expressions of interest.
Belfast's restaurant scene was also making up in part for inactivity in other sectors, with new openings including Ox on Oxford Street.
CBRE's report said the lack of action in Northern Ireland was at odds with two quarters in a row of strong transaction volumes in the Republic, and improving prices in the Dublin market buoyed by lower corporation tax.