Investment in Northern Ireland commercial real estate is delivering better returns than the majority of mainland UK locations — and are even beating many European cities.
According to MSCI’s first publicly released Northern Ireland Investment Review the Province’s property investments posted a total return of 10.9 per cent year-on-year in 2014. That is a near four per cent increase on the previous year and a vast improvement on 2012’s negative return.
Prepared in conjunction with Ulster University, the review also states that — aided by strengthening capital values — Belfast’s commercial property market is holding its own against traditional British and Irish cities.
“The findings further highlight the growing strength of the Belfast market in a UK and European context, which shows considerable improvement,” commented Robert Ditty, a senior director at commercial property firm CBRE.
“With all commercial property in Belfast returning 10.6 per cent year-on-year in 2014 and the European average at 9.4 per cent, Belfast outperformed many major cities including Amsterdam, Copenhagen, Lisbon and Stockholm.
“The European sector averages for Europe in both the retail and office sector were also outperformed by Belfast, due to its continuing high levels of income return,” he said, adding that “of the 15 European cities analysed, Belfast had the highest income return at 7.8 per cent year-on-year — that even surpassed Dublin”.
Despite recent challenging economic conditions, a separate study claims that investors are turning to Northern Ireland’s high streets due to a lack of top retail spaces elsewhere around the UK.
Commenting on her company’s latest Midsummer Retail Report, Tracy Flannigan, a director of professional services at Colliers International in Belfast, said: it had been an exciting year in terms of retail transactions, with the bulk of occupational activity for Northern Ireland being focused around Belfast City centre.”
Notable transactions include Lidl’s acquisition of 15,000 sq ft at the former In-Shop on Belfast High Street and a number of transactions on Donegall Place such as Zara, Gap, Skechers and Nationwide.
“Interestingly, we are also seeing new operators entering the Northern Ireland retail and leisure market for this first time in 2015. Dr Martin’s, Michael Kors and Yo Sushi are just a few to announced new stores, and there’s more on the way,” he added.
“This increase in letting activity in Belfast city centre in the last 12 months is largely driven by an increase in consumer confidence.”
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