Warning over lack of office space
Dwindling availability of prime office space in Belfast could undermine efforts to attract multinational corporations to set up in Northern Ireland, a report has warned.
With hardly any new construction in recent years, only 5% of top grade existing office floorspace in the city is available for rent, according to the latest study of the region's commercial property sector.
With demand having stabilised after the economic downturn and now poised to grow, the research by commercial property agent Lisney Belfast predicted a "pinch point" if the issue of supply is not addressed.
It said the problem threatened to "affect the attractiveness of Northern Ireland as a whole" to large corporations from outside Northern Ireland.
Declan Flynn, managing director at Lisney Belfast, suggested the Stormont Executive may need to intervene to help stimulate development.
"We previously voiced our concerns with regard to the potential lack of supply of Grade A office space and the effect that this will have on our wider economy should Northern Ireland become unable to provide suitable accommodation for multi-nationals," he said.
"Our concerns are now a reality with vacancy levels of 5% and falling.
"Lack of finance in general and specifically development finance is still an issue and there may be a need for Stormont to intervene in the market to help bring forward the office development pipeline to enhance their stated job creation aims.
"The demand for new Grade A office space is evident but without the appropriate supply in place to meet this demand, we will undoubtedly see competition for the space that does remain resulting in increased rents within the sector."
Looking at the commercial sector as a whole, the report found that investment volumes have increased sixfold in the last two years.
The total of assets sold, under offer or brought to market in 2013 sits at more than £150 million - with the figure in 2011 around £25 million.
Mr Flynn said the fundamentals for a sustainable recovery in the market were in place.
While the report, now in its third year, noted continuing problems with empty retail units, it said the closure rate had stabilised.
Around one in five shops across the region remain empty and while many towns continued to see more closed signs go up in 2013, a number of places experienced partial high street recoveries, among them Enniskillen, Coleraine and Londonderry.