Belfast Telegraph

Northern Ireland commercial property 'offers best rate of return across UK and Ireland'

By John Mulgrew

Northern Ireland's commercial property market offers businesses and investors a higher rate of return than elsewhere in the UK and in big cities like Dublin, it's been claimed.

According to commercial property and real estate services adviser CBRE's Northern Ireland Outlook 2018, prime yields - the annual rent achieved from a property divided by the property's value - are higher across all sectors in Northern Ireland.

Andrew Marston, the firm's director of UK office and industrial research, said: "On a global basis, we're beginning to see rising interest rates in the US and elsewhere and that will start to weigh on prime yields for commercial property.

"But in Northern Ireland yields have plenty of cushion and there is a wide arbitrage between Belfast and the likes of London and Dublin.

"That has helped draw overseas property investment to Northern Ireland, as recent sales have shown."

The biggest sale last year was the £123m purchase of CastleCourt Shopping Centre in Belfast by Holywood-based Wirefox, which was backed by funding from China.

Prime yields for high street shops in Northern Ireland stand at 5.75%.

That's compared to 4% elsewhere in the UK, and 3.15% in the Republic.

And for offices, yields in Northern Ireland stand at 6% compared to 4% in the City of London or 4% in Dublin.

However, Mr Marston also said that waning consumer confidence is weighing on the retail lettings market, while the hotel sector is enjoying growing demand from a steady increase in tourists to Northern Ireland.

Meanwhile, Will Church from CBRE Capital Advisors, which is handling the £100m Northern Ireland Investment fund, said it has already had interest from companies.

"We have plenty of capacity and would urge more investors and developers to apply," Mr Church said.

It was the successful bidder for the Northern Ireland Investment Fund.

The scheme was delayed by around a year, and at risk of being lost due to Brexit.

In 2016, in an email seen by the Belfast Telegraph from the Department of Finance, it said "uncertainty" and a "greater reluctance" by the European Investment Bank (EIB) meant it was "reassessing possible delivery models".

Meanwhile, Brian Lavery, managing director of CBRE's Belfast office, speaking at the event, said: "This year we at CBRE, along with our peers in the Northern Ireland business and property world, have had to continually make excuses to potential overseas investors for our lack of local leadership.

"It is now over a full year since the Executive collapsed and we collectively put our heads in our hands and sighed 'not again'.

"We at CBRE know that our success depends on the success of the whole economy and of a whole vibrant society.

"We are well aware of the need to positively influence the environment in which we work and live to help Northern Ireland build a competitive advantage."

Belfast Telegraph

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