Hopes of a rise in investment into Northern Irish property still hang in the balance despite the restoration of the government, according to local developers.
The Northern Ireland Assembly at Stormont reopened for business last week after the government collapsed three years ago. DUP leader Arlene Foster picked up the first minister role she lost when the previous administration ended in 2017, while Sinn Fein’s Stormont leader Michelle O’Neill has become deputy first minister.
It was hailed as a “momentous day” by Boris Johnson, with the UK prime minister agreeing to hand over up to £2bn to the new Northern Ireland executive as part of the deal.
Property developers and investors have welcomed the news. “It’s great Stormont is back up and running,” says Patrick O’Gorman, principal at Bywater, which, alongside Ashmour Developments, secured planning permission for a 260,000 sq ft office-led regeneration project in the Smithfield area of Belfast in June last year.
“It provides political certainty,” O’Gorman adds. “Some [investors] have been scared off by the lack of government and uncertainty around Brexit, whether it will be good or bad for Northern Ireland.”
A foot in both camps
That latter point, however, remains unclear. And there are some, including O’Gorman, who fear that the DUP’s approach to Brexit could yet see Northern Ireland miss out on opportunity.
The DUP is resolutely opposed to any deal that appears to treat Northern Ireland differently from the rest of the UK. The DUP refused to support the Brexit deal struck by Johnson because it will keep Northern Ireland subject to EU customs union rules and some single market rules.
“My own view is Brexit could be amazing for Northern Ireland if Stormont fights for Northern Ireland in a united manner and aims for a Brexit foot in both camps,” O’Gorman says.
“No one has outlined the small print of what the Brexit deal will look like for Northern Ireland. I hope the difference between Northern Ireland and the rest of the UK is as small as possible. But equally, a very small difference could be amazing for Northern Ireland if it could have a foot in both camps – so if you’re a finance house which wants to access finance markets in the EU and the UK, you can do it in Belfast.”
Aurora Prime Real Estate fund manager David Gavaghan, who was also chief executive of Belfast’s Titanic Quarter for nearly three years, adds that the new executive will need “a collective will” to tackle “a broad range of complex issues”. He adds: “Historically we have allowed so many issues to sit and fester. Not only do we need to deal with these but we also need to address new issues and challenges not least climate change and meeting the target of zero carbon emissions in the next couple of decades is an enormous one. Then there is of course all the Brexit related issues and our place on these two islands and how to grow our economy in a globally competitive world.”
Below-average investment
O’Gorman’s comments come as investment in Northern Ireland property remains at a historic low. Last year, investment volumes came in at £215.1m, a notable 19% above 2018 but still 4% below the 10-year average, according to Lambert Smith Hampton.
A senior Northern Ireland-based property investor says: “I think it’s very sad the DUP has prevented Northern Ireland from exploiting its unique position of potentially remaining half in and half out of Europe, and therefore in a different position from England.”
Quintain’s joint managing director for Ireland, Eddie Byrne, says the company has looked at opportunities to invest in Northern Irish real estate, but that such plans are still some way off because Brexit uncertainty remains a critical stumbling block.
“Anything that improves the governance of Northern Ireland has got to be positive, but I don’t think restoring Stormont is as important as Brexit in the overall scheme of things.”
To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette
