Northern Ireland commercial property has had its strongest year since 2017, as investment volumes more than doubled in 2021.
Data from CBRE NI shows almost £290m being invested over the year in 30 transactions.
The haul was boosted by the £87m sale of Belfast’s Merchant Square, which was bought in March last year by a Middle Eastern investment fund. The deal was the largest office investment recorded in Northern Ireland to date.
Other notable investments included Supermarket Income REIT’s £24.8m purchase of Balloo Retail Park in Bangor and DS Properties buying Shane Retail Park in Belfast for £23m.
Gavin Elliott, senior director at CBRE NI, said there had been a flight to quality and assets with strong underlying value and occupational demand. “Northern Ireland has an attractive real estate yield advantage when compared with GB and ROI and we expect to see strong investor appetite in Northern Ireland continue into 2022, largely due to our unique location as a gateway between the UK and EU.”
CBRE’s research shows that offices and retail were the key investment sectors across 2021, accounting for approximately 43% and 40% respectively of the overall spend. Industrial and alternatives made up around 11% and 6% of activity respectively. Elliott said both sectors are expected to increase their market share in the coming years.
He added that while traditional core assets such as retail warehousing and well-leased prime offices would continue to attract buyers, he expected “beds, meds and sheds” to become increasingly popular to investors.
Institutional investors accounted for 38% of the deals, while local investors bought more than 33%, propcos accounted for over 15% and REITs took around 14%.
Brian Lavery, managing director of CBRE NI, said: “We have seen a dramatic increase in investor appetite for properties across all sectors, which has been primarily driven by the low interest rate environment and the continuing improvement in the occupier markets and wider economy. Furthermore, with inflationary pressure being felt throughout the UK economy, investor sentiment for real estate will continue to strengthen.”
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