Retail boom for Belfast as vacancy rate falls
Belfast is in the midst of a retail boom with vacancy rates in its top shopping spots the lowest for five years, according to a report.
Commercial property agents Lisney said the city had gone from one in 10 shops being empty in 2014 to just one in five lying vacant during 2016.
And at one in 10, the vacancy rate was now the lowest since 2011, when it was 16.5%.
The fall has been driven by the arrival of a string of new retailers, from Danish chain Sostrene Grene to Spanish fashion shop Stradivarius — and trade was also up due to the fall in sterling following the vote to leave the EU.
Lisney’s findings in its commercial report for 2016 also chime with the purchasing managers index (PMI) from Ulster Bank for December, which said retail in Northern Ireland expanded at its fastest rate for 14 years towards the end of 2016.
But Lisney’s research also found that the value of investment deals fell by nearly 50% in 2016, from a five-year peak of £420m to £213m.
However, it said there had been some positive developments, such as the sale of a unit at Sprucefield Park, let to Currys and PC World, to pension fund Aberdeen Asset Management. And it said that looking ahead, investment deals could be inhibited by Brexit, with Article 50 due to be triggered in March, and by US President Donald Trump’s ‘America First’ vow. However, more office space was being taken up by tenants.
Declan Flynn, managing director of Lisney Northern Ireland, said: “Investment volumes of £40m for the final quarter of 2016 go some way towards demonstrating the prevailing challenges currently facing the investment sector, such as the triggering of Article 50, the local political situation and the potentially more protectionist agenda coming out of the US.
“However, despite the political uncertainty, the market has remained relatively robust in a number of areas. We have seen the return of the UK pension funds to the province, acquiring the DSG investment at Sprucefield, which is a welcome sign that they are comfortable with the longer term sustainability and resilience of our market.
“Uncertainty at a local and national level will continue to stall investment decisions, but our fundamentals remain strong in all sectors.
“The market is on a solid footing and, with low interest rates, commercial property remains an attractive proposition.” And he said the outlook for retail in 2017 was “positive” with demand still strong for prime space.
In addition, new developments were planned, including Parker Green’s extension of The Quays in Newry, and work by Turkington Holdings on Laganbank in Lisburn.
He added: “Prime rents look set to continue rising, with vacancy rates continuing to reduce.”