The value of commercial property transactions in Northern Ireland is expected to reach £300m this year, according to advisory firm Lisney.
In its Q2 2017 report, Lisney said the market had sustained a “pausing effect” due to the UK general election.
But transaction volumes are expected to increase significantly with the £125m purchase of CastleCourt Shopping Centre by Wirefox completing in Q3. Investment volumes reached £18m in Q2, with a further £200m = under offer or in legals and £69m on the market.
The report also found that office take-up from April-June improved on the first quarter, reaching 43,000 sq ft, but added that unsatisfied demand is now between 400,000 and 500,000 sq ft.
In the retail sector, Lisney said Q2 was marked by more activity in the regions with significant new lettings in Enniskillen, Coleraine, Bangor, Ballymena, Newry and Derry.
Retail vacancy rates in Belfast city are expected to fall below 10%, pushing prime rents to between £135 and £150 per sq ft.
A renewed interest in industrial occupation and investment is also expected, given the focus on exports and improved profitability due to the fall in value of sterling.
Declan Flynn, managing director of Lisney Northern Ireland, said: “Overall transaction levels in the Northern Ireland commercial property market are expected to rise significantly in 2017 compared with last year, and we are seeing continued demand, particularly for investment stock.
“Subdued investment volumes over the first half of the year were as anticipated in the context of the general election while its pausing effect was amplified due to the wider macro political climate.
“There are positive signs ahead for the local office market in the third quarter and beyond, attributable to unsatisfied demand, continued inward investment, and new market entrants, particularly within the creative industries sector.
“Given the levels of demand, there is now a greater emphasis on delivering refurbishment projects swiftly and pushing speculative new-build schemes through planning without undue delay.
“On the supply side, the commencement of groundworks at Chichester Street on behalf of Orby Developments is another positive move.”
He added: “In retail, the effect that Brexit uncertainty is having on consumer confidence is a real worry for retailers, but border towns are benefiting from the strengthening of the euro against the pound.
“Vacancy rates in Belfast are at an all-time low and we expect a major announcement over the coming months on a new occupant for the former BHS store on Castle Lane.
“Speculative construction meanwhile, is still not a viable option for developers in the industrial sector, resulting in a number of owner-occupiers constructing their own premises.”
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