Bustle in the markets

Despite the much-touted economic downturn since 11 September, Northern Ireland’s future looks bright. By Noella Pio Kivlehan With a population of only 1.6m, 50% of which is clustered around Belfast, it’s not surprising that the goings on the rest of Northern Ireland get sidelined. But over the past year there has been a lot of activity in the commercial markets in the six counties that make up Northern Ireland – and this is in despite the well-documented economic downturn and the events of 11 September. More than 1.5m sq ft of retail both in and out of town has either opened, is being built or is at the planning stage. This includes Stannifer and Snoddons Construction’s development on a 50-acre (20.3ha) site at the junction of the M1 and Hillsborough Road, which includes 230,000 sq ft (21,367m2) of food and non-food space. In retail, the out-of-town market has been described by Keith Shiells of Lambert Smith Hampton as “very active” with schemes such as Abbey Retail Park in Newtownabbey and Crescent Retail Park, Derry. LSH’s Corina Collins gives a warning, however, about the growth in a particular sector of the out-of-town market. “With the proliferation of out-of-town retail warehouse schemes, it will be vitally important to restrict bulky goods use.” Collins says this is because the growing trend for major discount retailers such as TK Maxx and Matalan preferring to open out of town should be scaled down “in order to preserve the vitality of town centres”. Town centres stable At the moment, however, most town centres are holding their own, with one, Craigavon, a town created 30 years ago, finally making plans to create a bona fide centre. Overall, the outlook for Northern Ireland seems bright. Lambert Smith Hampton’s Commercial property review 2002 states: “The prospects in 2002 are for continuing expansion in the wider economy and, if exchange rates stabilise, a more buoyant manufacturing sector.” This is shown by continuing activity in the province’s towns and cities, particularly in Derry. Derry Derry, Northern Ireland’s second-largest city, has seen a fair amount of changes during the past year – some of them more welcomed than others. The city’s retail market got a major lift with the announcement last October that Debenhams is to open a £25m, 80,000 sq ft (5,109m2) unit in the extension to the existing Foyleside in spring 2004. But the continuing success of Foyleside, anchored by Marks & Spencer, is proving detrimental to some of the town’s traditional retail pitches. In the seven years since Foyleside opened, the top of Strand Road and Waterloo Place has become the home to boarded-up shops and discount stores. Derry’s City Centre Initiative group says there are plans to eventually concentrate on the Waterloo area following the regeneration of Spencer Road on the city’s east bank. The city’s other shopping centre, the 21-year-old, 200,000 sq ft (18,580m2) Richmond Centre has seen its fair share of operators leaving, with some moving to Foyleside. In January, Dublin-based Dunnes, which was the anchor tenant occupying over 25,000 sq ft (2,322m2) spread over four units, pulled out of its remaining two units on a time-scale that LSH’s Collins describes as “short notice”. Change to secondary pitch? Boots also left the Richmond Centre to move to Foyleside, leaving some agents to view the latter as almost a secondary pitch. This theory is backed up when looking at the rents for both centres. The Richmond Centre is around £75 per sq ft zone A , while Foyleside stands at around £93 per sq ft. The fact that Lambert Smith Hampton acts as agent for both has also raised a few eyebrows among other agents who question how both schemes can be fairly marketed. But LHS’s Collins defends her company’s involvement in both developments. She says that it has acted for WG Mitchell, owner of the Richmond centre since the opening of the centre, and it is happy about LSH’s involvement. “We have different teams at LSH, so there’s no preferential treatment to any enquiry,” says Collins. And a spokesperson for Foyleside, which is owned by Foyleside Ltd, says the two centres work in tandem. Collins adds that footfalls in the Richmond Centre have remained at their pre-Foyleside levels, and reveals that the centre is set to be refurbished. One of the vacant units has also been bought back by the landlord and Collins says there are “interested parties” looking at the space, which may be split into two levels. Elsewhere, parts of the city are set to benefit from a number of sites being opened up. Taggart Holdings is planning two mixed-use developments totalling 130,000 sq ft (12,058m2) of office and retail. One is Atlantic Wharf, 90 Strand Road, which has already received planning consent, while an application has been submitted for 52 Strand Street, Taggart. A total of 85 acres (34.3ha) is to be made available in the city. This will include two former army bases, Ebrington Barracks, the largest site at 60 acres (24ha), and the 15-acre (6ha) Fort George, which was sold to the Harbour Commission. The other two sites, on the west bank of the river are the 8-acre (3ha) Queens Quay site and the 2-acre (0.8ha) Tillie & Henderson factory site. A debate and consultation about what will happen with the sites is being carried out in a study ordered in March by Northern Ireland’s Social Development minister Nigel Dobbs. It will look at all possible uses, including urban villages, mixed-use residential and commercial developments and links to other locations. But, according to Robert Ditty of Osborne King, there is pressure from both political sides and even the University of Ulster, regarding the city’s need for sites. It is not know when a decision will be made, but Ditty has called it a “waiting game”. Craigavon It has been 30 years coming, but finally Craigavon, Co Armagh, a town which was created in the 1960s to ease the population pressure on Belfast, is to get a city centre. It is very early days for the scheme, but Suzanne Allen of Insignia Richard Ellis Gunne, Belfast, says the redevelopment of 100 acres (40ha) of land “will include a huge chunk of retail”. Allen says a major multi-national blue-chip company will anchor the scheme. Lisburn The town has been a hive of activity over the past couple of years. Lisburn Square, the 240,000 sq ft (22,296m2) shopping complex which opened late last year, has now attracted operators such as Sisley, Morgan and Moshulu. Four of the 28 units still remain empty at the site where zone A rents are £65 per sq ft. Also at Sprucefield, Lisburn, is the 50-acre (20.3ha) development by Stannifer and Snoddons Construction. Industrial Market sluggish, say agents Slow is the main word agents in Northern Ireland use to sum up the activity in last year’s industrial market. Only a few major deals have been completed since March last year. Securicor took space at Nutts Corner, near Belfast International Airport, Musgrave/ Supervalue took 200,000 sq ft at Dragan Road, Belfast, while the Mersey Docks & Harbour Co completed a deal to create a multi-million-pound warehousing complex in the Port of Belfast. The 107,642 sq ft (10,000m2) development was for MDHC’s logistics subsidiary Roadferry. David McNeills of Lisney says there is still a lack of available land in the province. He adds that, reluctant as he is, he has to lay some of the blame at the door of the Industrial Development Board, which controls a substantial amount of land. Collier CRE’s Mark Thallon has another theory. He explains: “The market has not been that strong because we are not a distribution hub. Even the likes of Safeway and Sainsbury distribute through Scotland. It’s fair to say that our industrial market is in its infancy.” However, there might be a bit of hope on the land front. Thallon says there is talk about the IDB’s Global point becoming a distribution centre “but I think the IDB still wants it to be a business park”. The saga of what’s going to happen to Global Point – one of the few ready-to-go greenfield sites near Belfast’s city centre – has been going on for the past couple of years. Following the well-documented withdrawal of ProLogis in the summer of 2000, the 110-acre (44.5ha) site has remained undeveloped. It has been mooted that the site will be broken up to be let to individual companies. But, according to LSH’s Jago Bret, the site is due to come to the market and, he says, “are a number of parties expressing interest.” Belfast industrial prime rents and yields There has been little growth during the past two years Source: Insignia Richard Ellis Gunne Research Consultancy Current Northern Ireland zone A shopping centre rents Belfast commands the highest rents Source: Lambert Smith Hampton