Investment activity in the commercial real estate sector in Northern Ireland rebounded last year, driven by the sale of PwC’s new headquarters in Belfast Merchant Square.
This is according to real estate agent CBRE who said last year’s investment volumes were double those of 2020 and the highest on record since 2017.
Total volume was boosted by the sale of Merchant Square to a Middle East investment fund for £ 87million, the largest ever office investment deal in Northern Ireland.
Even without the deal, the market has had a very busy year with a number of significant transactions including the sale of Balloo Retail Park in Bangor to Supermarket Income REIT for £ 24.8million and Shane Retail Park in Belfast, which was sold to DS Properties for £ 23 million.
Gavin Elliott, senior director of CBRE NI, said Northern Ireland continued to provide value to investors.
“Northern Ireland has an attractive property yield advantage over Great Britain and ROI and we expect investor appetite in Northern Ireland to continue through 2022, in large partly because of our unique location as a gateway between the UK and the EU, “he said.
“Traditional core assets such as well-let blue-chip retail warehouses and office space will continue to attract suitable buyers, but we also expect investors to target alternative sectors such as construction to let, healthcare. health and logistics or ‘beds, medicines and sheds’, which bodes well for Northern Ireland.
CBRE research shows that offices and retail were the main areas of investment in 2021, accounting for around 43% and 40% of overall spending, respectively.
Industrial and Alternatives accounted for around 11% and 6% of the activity, respectively, but the two sectors are expected to increase their market share to help distribute volumes more evenly across all sectors in the years to come.
Institutional investors were responsible for buying the bulk of commercial real estate in Northern Ireland during the year with over 38% stake, while local investors bought over 33%, PropCos (real estate companies) more than 15% and REITs (real estate investment companies) around 14%.
Brian Lavery, chief executive of CBRE NI, said the market performed well last year.
“We have seen a dramatic increase in investor appetite for properties across all sectors, primarily due to the low interest rate environment and the continued improvement in homeowner markets and the economy in the United States. broad sense, “he said. “In addition, with the inflationary pressure felt across the UK economy, investor sentiment for real estate will continue to strengthen.
“It is clear that there is a growing appetite for Northern Ireland commercial real estate from investors from all walks of life. With a multitude of reasons to invest – from an exceptional talent pool to a high standard of living – Northern Ireland strongly attracts international companies looking for better returns and we expect this to continue in 2022. . “