The end of the recession marked the conclusion of several years of uncertainty in the commercial property market, with areas which previously struggled to attract investors enjoying a welcome return to prosperity. This was particularly true of Belfast as a new report has shown its investors saw the strongest year in over three decades in 2013.
The report, which has just been released by Ulster University in partnership with the Investment Property Databank (IPD), compared Belfast’s commercial market performance during 2013 with 15 gateway European cities. Data included shows that the city outperformed key destinations including London, Paris and Copenhagen in terms of income return for commercial property investors, coming second only to Dublin.
During the period, commercial property income returns increased by 8.9 per cent year on year while rental values grew by an average of 2.8 per cent year on year. This was the first significant growth since 2006, indicating that the market was truly beginning to return to strength after several years of decline and stagnation.
Lead researcher for the report, Dr Martin Haran of Ulster University, believes that the findings of the report may encourage higher volumes of investment in Belfast in the coming years.
He says; “This independent research points to a strengthening of the market in Northern Ireland.
“To be able to benchmark Belfast relative to other cities across Europe on a like for like basis is critical in the modern investment climate.
“The research provides clear evidence of the investment potential of the Northern Ireland property market to the international investment community, providing key performance indicators which serve as the basis for investment decision making.”
The report utilised information gathered during 2013 as this was, during the period in which research was undertaken, the last calendar year for which enough data was available. Since then, the market has continued to grow in strength, with notable deals including the Obel’s sale agreement with US firm Marathon Asset Finance, said to be worth around £20 million.
In order to attract top investors, a city must prove that its commercial assets are able to provide strong returns along with further growth opportunities for the future. With this report indicating that the future is nothing but bright for Belfast, and a number of commercial developments currently in the pipeline, it seems that Northern Ireland may soon benefit from a flood of international investors keen to gain key assets in an increasingly strong European market.
Do you think that this report will encourage investors to snap up key assets in Belfast, or will most hold out until further data regarding the commercial market in 2014 is forthcoming?
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