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Commercial property: the ups and downs of 2021

There have been some ups and downs across the commercial property market in the weeks and months since the pandemic began. John Mulgrew looks at the latest research by CBRE and examines the trends, demands, peaks and troughs across the market so far this year, and what’s ahead


Belfast city centre

Belfast city centre

Getty Images/iStockphoto

Belfast city centre

It’s reasonable to say that there’s an uptick in commercial property activity here at the moment, following last year’s uncertainty.

Several deals have been done and completed this year, adding to an overall predicted £300m for 2021, according to commercial property firm CBRE.

And while the sale of PwC’s £87m flagship Merchant Square offices in the heart of Belfast city centre has gone some way in adding in ensuring office market deals made up 51% of total overall activity this year, out of town retail is also continuing to add to the figures.

Shane Retail Park in Boucher Road in Belfast was sold to DS Properties for £23m, while Ballymena’s Fairhill Shopping Centre went to Magell for £6.9m – a retail property which sold for more than six times that value, just six years ago.

Elsewhere in the office market, the Danesfort office complex was sold to Martin Group for £5.25m.

CBRE also said that there is active interest in the The Ewart – the grade A office space which will see Deloitte as its anchor tenant, taking the first three and top two floors.

Some 11 storeys remain to be let, with around 120,000 sq ft of office space.

It remains to be seen how quickly demand for some of Belfast’s soon to be completed new office developments picks up.

The take-up for office space was just over 81,000 sq ft during the first half of 2021 – that’s against an annual five-year average take-up of 477,000 sq ft.

But looking at some of the latest charts from CBRE, supply is soon to flood the market. It’ll offer potential foreign direct investors, and local firms alike, a wide choice of options – something Northern Ireland hasn’t enjoyed in recent years.

However, that also means there’s a chunk of around 600,000 sq ft of grade A office space to be filled – primarily down to several major builds such as City Quays 3, Olympic House, The Ewart and The Paper Exchange.

Elsewhere, it’s now understood Marks and Spencer is eyeing around seven new food stores in Northern Ireland, as it grows its burgeoning Simply Food brand.

Meanwhile, Go Pig or Go Home, producer of healthy ready meals, has moved to a 16,000 sq ft unit at Titanic Quarter’s Channel Commercial Park.

According to CBRE, indications of activity so far this year also show that the office sector accounted for the bulk (55%) of the recorded deals, a figure which chimes with indications from a number of large corporates which have reiterated the importance of the office in recent months.

“It’s clear there is growing appetite for Northern Ireland’s commercial property from investors across the spectrum,” Brian Lavery, managing director at CBRE NI, said.

“With a raft of reasons to invest – from a strong talent pool to a high standard of living – Northern Ireland provides a strong draw for international companies looking for improved returns and we expect that to continue in the months ahead.”

And turning to the investment market, Gavin Elliott, senior director, capital markets at CBRE NI, said: “The Northern Ireland commercial property investment market has posted another strong quarter of activity as the economy continues to pick up pace and investors return.

“Over the year we have seen a dramatic increase in investor appetite for properties across all sectors, which has been primarily driven by the low interest rate environment and the continuing improvement in the occupier markets and the wider economy.” π