Belfast offices experienced a lettings drought in the first half of the year, with take-up down 28% year-on-year and only 14 deals recorded.
According to statistics from CBRE and Lambert Smith Hampton, Belfast’s H1 take-up was heavily reliant on HMRC’s 104,220 sq ft leasing at Orby Investments’ Erskine House, without which just 80,000 sq ft would have been leased in the first half of the year.
This figure compares with 230,000 sq ft of lettings over the same period in 2016, although local agents said the numbers would be boosted over the next six months by around 80,000 sq ft of deals that are currently under offer.
Market in numbers
- 14 deals in H1 2017
- 60 deals in 2016
- 104,000 sq ft letting to HMRC
- 80,000 sq ft of deals in legals
- 28% rise in availability
Nonetheless, as one agent puts it, “the HMRC deal pulled [the H1 figures] out of a hole”.
The number of deals fell significantly, from more than 60 in the whole of last year to just 14 in the first six months of 2017.
Meanwhile, availability rose to nearly 1m sq ft, up 28% on the previous six months. Around 747,000 sq ft of space is in the development pipeline.
The disappointing take-up figures have dropped from a relatively high benchmark and, according to LSH, overall take-up for 2017 is on track to compare more favourably against the 10-year average.
However, there has been a clear drop-off since the EU referendum as Belfast struggles to make the case for investment versus other EU cities such as Dublin or Frankfurt.
In the 12 months leading up to the EU referendum, more than 500,000 sq ft of deals were signed.
This dropped to 380,000 sq ft in the 12 intervening months. Without the HMRC deal that would have amounted to around a 50% drop in take-up during the post-referendum period.
Although occupiers have signed several large deals that will count towards 2018’s statistics – specifically, Concentrix and Allstate signing for headquarters totalling 270,000 sq ft – these are relocating businesses and the economic growth picture looks more limited.
CBRE’s Market View conceded that the first six months had been relatively quiet, but said Invest NI had made significant job announcements on behalf of companies arriving and expanding into Northern Ireland, including Bazaarvoice, Redline Trading Solutions, Anomali and Unosquare.
CBRE Belfast director David Wright said these would likely convert into office transactions over the coming months.
Deals currently under offer are believed to include nearly 50,000 sq ft at the speculatively developed City Quays 2 on Belfast Harbour to tenants including ITV and Wireless Group.
LSH described take-up for 2017 so far as “subdued” by comparison with the “very strong” 2016.
To send feedback, e-mail nick.johnstone@egi.co.uk or tweet @n_johnstone or @estatesgazette
