Belfast Telegraph

Political impasse 'affecting commercial property sales'

Margaret Canning

By Margaret Canning

Political uncertainty has hampered major commercial property sales despite a record year of office lettings in the province, according to a report.

Agency CBRE said there had been 84 office deals during 2018 - a record which was more than double the year before.

And it said there were likely to be more lettings in 2019 as 'north-shoring' moves increased - with firms setting up in Northern Ireland to avail of its proximity to the Republic after Brexit.

But CBRE said bigger investments had been challenging, with most potential buyers from overseas harbouring concerns about political issues in Northern Ireland.

Office deals during the year included IT giant Allstate's tenancy at Mays Meadow, law firm TLT's letting at River House and business advisory firm PwC's announcement of a plan to move around 1,900 staff from Waterfront Plaza to Merchant Square.

CBRE managing director Brian Lavery said the office market here was an indicator of the health of the economy.

He said: "Foreign direct investment in the region remains strong and indigenous technology and professional services businesses are growing, as the latest office accommodation results indicate.

"We believe that Northern Ireland can capitalise on 'north-shoring' opportunities from London and Dublin going forward into 2019 and beyond despite Brexit dominating the landscape, because of the supply of talent and the attractive costs base."

He said more investment in Grade A offices was needed, with just 250,000 sq ft available in fragments.

He forecast growth in demand for residential living in the city - which he said was "the trend to track in 2019 and beyond".

Mr Lavery said the investment sector had experienced a fall in activity, because of political uncertainty due to the absence of an Executive and Brexit negotiations.

Mr Lavery continued: "Larger investments proved more challenging in 2018, as the majority of investors are from outside of the region and have concerns around political issues specific to Northern Ireland."

Deals during the year included the sale of the Obel 68 offices to Belfast Harbour for £15.2m, and the sale of the NCP car park in Montgomery Street to CBRE Global Investors for £18m.

He added: "At present, Northern Ireland does offer a unique investment opportunity, although success will be dependent on a Brexit deal which prioritises the local business and economy."

CBRE said its research indicated that office rents would reach £21 to £23 per sq ft during the year. It also said it plans to announce lending during 2019 to fund "hotels, high-tech research facilities, energy efficiency and industrial infrastructure" as part of the Northern Ireland Investment Fund, which was launched by CBRE Capital Advisors at the start of 2018.

Belfast Telegraph