Belfast Telegraph

Thursday 24 July 2014

Public property sale can raise millions: chartered surveyors

New chairman of RICS Northern Ireland Paul Kendrick receives the chain of office from out-going chairman Michael Hannaway
New chairman of RICS Northern Ireland Paul Kendrick receives the chain of office from out-going chairman Michael Hannaway

The Executive should start selling public sector property in Northern Ireland to raise funds for roads and other infrastructure projects.

That's the opinion of property body The Royal Institute of Charted Surveyors (RICS) which believes such a scheme would raise "hundreds of millions of pounds" to put toward capital spending.

New RICS chair Paul Kendrick said "carefully managed asset sales" over the next few years would be well timed to take advantage of recovery in the commercial property market, a move one agent said was in progress.

Rory McConnell from McConnell Chartered Surveyors said there is a strong appetite from local and institutional investors to buy property and those that are come on the market are selling.

"The market has turned," he said, "there is a wall of pent up demand. Institutions and pension funds have to find a home for their money, as do local investors who've been sitting on money."

He said growing confidence has paid a part in underpinning the market but it's also been reinforced by a lack of supply.

Mr Kendrick said he wasn't advocating dumping property on the market. "Clearly it is important not to flood a recovering market with assets – particularly when Nama and banks are seeking to sell property holdings – but a carefully managed asset disposal programme would be strongly in the public interest," he said.

"Infrastructure spending is hugely economically beneficial, both in terms of the immediate boost through job creation and money going directly into the economy, and also in terms of the long term boost to competition."

While Mr Kendrick's suggestions will likely be listened to by policy makers, at least one recent transaction shows the Executive building its property portfolio.

Jobs agency Invest NI recently bought its headquarters on Belfast's Bedford Street from the Nama-controlled loans of McAleer & Rushe for £17m.

The deal is thought to be the first time in Northern Ireland, government has bought headquarters built through a private finance initiative.

Nevertheless, Mr Kendrick believes a property sale would be in Northern Ireland's best interests.

"We would encourage the Executive to ensure that all departments are working in a coordinated way to maximise the opportunities," he said.

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