Rents for luxury office space in Northern Ireland have risen 19% in year
Rents on luxury office space in Northern Ireland have grown 19% in the past year, according to a report from commercial property agents.
Colliers said office rents were up 19% over the second quarter of the year, compared to the same period a year earlier. That was much higher than the average growth of 6.5% in rents UK-wide.
Grade A offices were now costing £15.50 per square foot, according to Collier's findings.
There is a reported shortage of new grade A office space in the city, with Invest NI now stepping in to offer funding to developers.
Good quality grade A offices are regarded as a crucial tool for attracting foreign direct investors.
Ian Duddy, head of business space for Colliers International in Belfast, said: "The shortage of grade A office space in Belfast has led a number of major occupiers toward developing their own headquarter office buildings."
But he said there was a lack of demand in Belfast for lower quality grade B offices. He said: "The secondary or grade B market did not experience the growth seen elsewhere nationally, a result of the high availability of stock in this sector in Belfast."
Last week, it was announced that Co Tyrone developer McAleer and Rushe will develop Clarendon House on Adelaide Street, after selling the site to Belfast City Council for £24.7m.
Planning permission has been given to knock down the building and replace it with a new 100,000 sq ft office complex. McAleer & Rushe has also renewed its bid to develop the site of Ewarts Warehouse in the city centre. The building is part of the wider Bedford Square development, which also includes Invest NI's headquarters, and an office tower block also planned by McAleer & Rushe in the second phase of the development.
Then Enterprise Minister Arlene Foster last month announced a scheme to ensure Northern Ireland has enough grade A office accommodation by providing funding to developers.
Speaking last month, she said increases in office rents would improve the financial viability of projects and encourage developers to re-enter the market.
She said Invest NI would explore whether mezzanine or equity finance could be lent to developers as a short-term intervention. Belfast Harbour Commission has also constructed a new office block at City Quays, where Chicago-based law firm Baker & McKenzie will base its Belfast operation.
Find commercial and rental properties at propertynews.com