Belfast Telegraph

EU vote makes investment in Northern Ireland properties 'a hard sell'

By John Mulgrew

Major London property funds are putting off investing in Northern Ireland amid the run-up to the Brexit vote next month, a debt advisor has warned.

Conor Devine, partner at GDP Capital, said funds he has spoken to are concerned if there was a Brexit, that Northern Ireland "would be more isolated" than the rest of the UK.

"And for that reason, they felt it would be more difficult to convince credit teams to invest capital," he said.

"It's a much harder sell. The issue is economists and investors don't like risk.

"We are throwing the dice here. The world is currently very unsettled as it is, and Brexit makes it more unsettled.

"Talking directly to funds, they raise this issue in a few minutes. It's a huge issue here, trying to sell Northern Ireland."

He said several "well respected funds" in the UK property market had said they were not investing in Northern Ireland in the run-up to the EU referendum on June 23.

"I met with a number of property investment funds while in London who already have capital deployed in Northern Ireland.

"The funders were very clear in our discussions, with the cognisant point being that if we are to exit the EU then Northern Ireland will be off the agenda with regards to them deploying any further funding. I found their views on this extremely alarming, even a little surprising."

A number of big City firms have snapped up major commercial property assets in Northern Ireland over the last year.

London investment firm Tristan Capital made the biggest inroads into Northern Ireland's property market, accounting for £150m in investment during 2015, according to Lisney.

It took on a number of high-profile retail parks and businesses, including part-financing the £32m deal to buy Junction One and The Outlet.

The largest investment was the £54.2m purchase of Bangor's Bloomfield Shopping Centre by Elandi with Tristan Capital.

However, Mr Devine's concerns come after a report from the Royal Institution of Chartered Surveyors (RICS) said the commercial property market in Northern Ireland is proving resilient amid the headwind of uncertainty leading up to the EU referendum.

Investment in both new retail and office space continued to grow in the first quarter of the year.

Just one in four Northern Ireland commercial market surveyors said uncertainty in the run-up to the June 23 vote was leading to reduced investment.

But this contrasted sharply with the fortunes of the London market, with 80% of those questioned saying investment was being impacted.

John-George Willis, head of law firm Tughans' corporate department, said while he wasn't aware of a marked drop in activity here, London was seeing a large fall.

"Activity here is buoyant, but I'm not sure about what will happen next month. In London, mergers and acquisitions (M&A) activity is down, with some by as much as 50%." He said that business was primarily within the UK and across Europe.

Belfast Telegraph