Northern Ireland’s commercial property investment sector held steady in 2023 despite economic and political challenges.
Research by CBRE NI showed that the region recorded total investment volumes of £338m over the year in 31 transactions.
This narrowly exceeded 2022’s tally of £330m, and marks the sector’s strongest performance since 2015.
Despite concerns about the rising cost of debt and economic headwinds, the robust investment volumes in 2023 underscored sustained investor confidence in Northern Ireland’s commercial real estate.
Domestic investors played a pivotal role, comprising 74% of the market, while institutional investors and property companies acquired 24% and 2%, respectively.
CBRE NI senior director Gavin Elliott said: “Investors gravitated towards value-add opportunities, which offered higher yields with limited availability of debt.”
This was illustrated by the shopping centre sector, which accounted for more than 36% of total investment during the year.
Standout transactions included the sale of Rushmere Shopping Centre Retail Park in Craigavon for £46.5m, Forestside Shopping Centre in Belfast for £42m, Abbey Retail Park in Newtownabbey for £40.6m, and Foyleside Shopping Centre in Londonderry for £27m.
In total, retail represented two-thirds of the annual spend. Offices accounted for 18%. The alternative sector saw a notable decline, constituting only 7% of the overall investment spend in 2023 compared to 22% in the previous year. CBRE NI said it expected alternatives to “experience a strong rebound” this year.
Elliott added that the political situation in Northern Ireland, with access to both UK and European markets through the Windsor Framework, “continues to present an opportunity for further substantial growth in the investment sector, and wider commercial property market in 2024”.
“However, as we have previously stated over the last 18 months, it is imperative that Stormont is restored in order to fully realise these opportunities,” he said.
Political leadership at the Northern Ireland Assembly, based at Stormont, has been in stasis since February 2022, when the power-sharing agreement between Sinn Féin and the DUP broke down.
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