Biggest property deals not always done in Belfast
More often than not, commentary about the commercial property market in Northern Ireland focuses on Greater Belfast. But this year, Newry has come much more to general prominence.
For starters, one of the largest investment deals of the year was Newry-based, with the Damolly Retail Park being sold for £30m to local business MJM Marine in October.
Given Newry’s strategic location on the Belfast-Dublin corridor, Brexit and border concerns have also brought the city to the fore since the referendum result. So we thought it was worth shedding some light on what has been happening in commercial property market in the area.
In our view, Newry is an attractive city to do business. Year-on-year, we have witnessed a 25% increase in transaction levels. And there is little sign of the Brexit vote impacting on activity yet.
Indeed, in the retail market, in day-to-day terms, the euro to sterling exchange rate has certainly boosted the local shopping centres during November and into December.
Infrastructure is also a factor in the city’s success.
As a regional hub outside Belfast, Newry has excellent road and rail networks — a prime factor in the recent letting of 4,000 sq ft in the Plaza Retail Park on the Belfast Road to Lynas Food Service.
The office market has been slower to show an upturn, but there are certainly some positive signs that 2017 will be a good year for this sector. For example, we have a substantial office complex set to be sold to a progressive local business. It is currently ‘in legals’ and should complete by the year end.
Alongside this is a major investment in a city centre retail/office scheme on the site of the former Newry Tax Office.
The new ‘Custom House’ scheme beside Bellini’s, Merchant’s Quay is being developed by Downshire Quay LLP at an investment of £2m. It will deliver a mixed office/retail scheme over three floors on a 0.7-acre site and is expected to complete in early 2017. The scheme will be anchored by South Down Dental Clinic who will occupy the first floor while the ground floor office/retail units are available to lease.
We mentioned the dominance of the Brexit factor in the final quarter of 2016 and it’s going to be a prevailing theme in 2017.
While we’ve not seen any new movers in retail terms there’s a tangible atmosphere of ‘wait and see’.
Initially we felt the banks might pull back on lending, but in recent weeks that has loosened again. Brexit is such an unknown entity with no timescale or clear idea of how it will impact on Northern Ireland, Newry and the border region specifically, that we see it as a shadow on what points towards a positive 2017 for Newry commercially. The exchange rate should remain a strong tailwind in this regard.
Ciara Aiken is a fellow of the RICS (Royal Institution of Chartered Surveyors) and commercial director of Best Property Services