An un-named pension fund has paid almost £9m for a Belfast office block indicating, claims one leading agent, that the city’s market is “going from strength to strength”.
The 11-storey Victoria House on Belfast’s Gloucester Street — which boasts a range of national and international tenants — was acquired for a client by Dublin-based F & C REIT. Although the asset manager, responsible for a global portfolio estimated to be worth around £7bn, has refused to name the buyer industry sources are certain it is a North American investor.
The £8.7m sale illustrates the continuing demand for Northern Ireland investment assets over the last 12 months, especially from US investors.
“This transaction is another positive step which suggests that the commercial property investment market in Northern Ireland is improving dramatically,” said Paddy Brennan, capital markets director with agents Lambert Smith Hampton, and whose agency represented F & C REIT in the Victoria House deal.
“We anticipate this positive trend will continue and we are likely to see more acquisitions of this nature before the end of the calendar year. It proves that Belfast’s office market is going from strength to strength.”
Built in 2008 with a fully-glazed frontage, Victoria House contains 58,400 sq ft of Grade A office space. It is unique from a Belfast perspective because there are no internal structural columns to obstruct the open plan floor plates.
The building’s long-term tenants include the Irish law firm Arthur Cox, Oracle Corporation UK, Royal National Institute for the Blind, recruitment agency CyberSource, insurance brokers AON McMillen, Zurich Insurance and IBM UK.
There is, however, a downside to the trend. Brennan warned that demand was currently outstripping the availability of premium office space and hoped that banks would soon take notice of a demand for funding for speculative development.
“This year has shown a definite interest from some developers for offices in order to meet the demand from occupiers,” Brennan added. “However, we have seen little or no interest from the local banks to return to the development finance market just yet,” he said. “Hopefully this will change in the near future.”
Another significant Belfast office sale, thought to be just days away, is the disposal of Windsor House on Bedford Street. Ten bids have been received for the high-rise block — mainly from overseas investors — and a deal is expected to be signed by the end of the month.
