Belfast Telegraph

Investment transactions soar in third quarter as outlook remains positive

By Margaret Canning

Spending by investors in commercial property here leapt to nearly £200m in the third quarter as major assets such as CastleCourt Shopping Centre changed hands, a report today said.

And commercial property agency Lambert Smith Hampton added that their outlook for the rest of the year was positive.

Their investment transactions bulletin said other big-ticket retail deals such as the £27.7m sale of a Tesco Extra in Newry also helped push up the level of investment to 12 times that in the first quarter.

In fact, retail transactions - amounting to £172.8m - accounted for just under 90% of activity in the quarter. And Wirefox's purchase of CastleCourt in Belfast was by far the biggest deal at £123m.

Sales of assets such as car parks, hotels and care homes managed to eclipse activity in the core sectors of office and industry.

The sale of care homes in Armagh and Jordanstown by Priory Group in August to LXi Real Estate Investment Trust for nearly £15m was the biggest deal in the mixed-use sector, LSH added.

Neil McShane, director in the capital markets division at LSH, said: "In the first half of this year we did record a drop in activity levels. However, in the second quarter there were positive signs that a stronger result was in the pipeline. The outlook for the final quarter of 2017 is positive for the commercial property market.

"The main barrier to activity in the first half of 2017 was the mismatch between healthy investor demand and the scarcity of larger value assets available.

"The pick-up in the third quarter and forecast for quarter four is the result of an increase in supply of good quality, larger value assets.

"These assets have helped to relieve investor frustrations, although they have been predominantly in the retail sector. A fluid supply of this asset type is required to maintain activity."

Investments for the whole of the year were expected to reach £350m -25% higher than 2016. Mr McShane added: "Recently, there has been a trend of competitive bidding for smaller lots with attractive tenants. For example, the Starbucks and Boojum properties on Botanic Avenue, the Caffè Nero in Newcastle and the Greggs properties in Bangor and Lisburn have attracted significant interest amongst local investors. In the coming months, a number of similar properties will come to market, and again we expect they will generate high levels of interest.

"It is positive to see that the health of the Northern Irish investment market is showing signs of continued resilience."

Belfast Telegraph