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Fall in office take-up as speculative building rises to decade high in city

The amount of office space taken up in Belfast during the first half of 2019 hit a five-year low, while speculative development has hit a 10-year high, a report has shown today.

A total of 181,970 sq ft was taken up in Belfast during the first half of the year (H1), 34% below the five-year average and 66% below the same six months last year, commercial real estate consultants Lambert Smith Hampton (LSH) have said.

Last year's Belfast office market report for H1 featured an unusually high level of uptake, including IT giant Allstate's new 138,225 sq ft headquarters and the Department of Finance's 150,000 sq ft lease of Nine Lanyon Place.

The 46,000 sq ft taken by business advisers PwC at Merchant Square was the biggest deal in the first half of 2019. It brought to 201,000 sq ft the company's occupation of the building.

According to the new LSH report, an undisclosed serviced office/co-working business pre-let 31,969 sq ft at Eagle Star House, while IT firm Neueda leased the West Tower at Lanyon Plaza (29,220 sq ft).

However, LSH has said that the level of speculative development ongoing in Belfast shows signs of improvement in the commercial property market.

Current construction of new and refurbished offices peaked at 1.3 million sq ft during H1, of which two-thirds is classed as speculative.

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On Donegall Square South, the 78,869 sq ft Mercantile is under construction and due for completion in 2020. The Ewart at Bedford Square (215,000 sq ft), scheduled to be completed in 2021, is partially (100,000 sq ft) pre-let to Deloitte.

In a joint venture between Titanic Quarter Ltd and Belfast Harbour, enabling works commenced on Olympic House (150,000 sq ft) in June. Belfast Harbour also commenced City Quays 3 (180,000 sq ft) in May. Both buildings are scheduled to be completed in 2021.

LSH said the availability of office space in Belfast had increased by 15% since the end of 2018. Although a significant amount of it is not ready for immediate occupation.

The commercial real estate firm described the 752,757 sq ft of space currently available as "tight", equivalent to 18 months of supply based on average take-up.