It’s hard to believe that we have now entered a second calendar year since the shock decision of the UK electorate to exit the European Union – a referendum result that had many anticipating a major downturn for the local commercial property market.
However, 18 months on – and just under 15 months until the actual date of Brexit – and the sky hasn’t yet fallen in. Far from it, in fact.
It is true to say that the referendum result - and the uncertainty that has followed it - has had an impact on the property market. With the political impasse at Stormont having also been an influencing factor, the level of activity has been more subdued than may have been the case otherwise.
However, the wheels are still turning and, as we look back on the past 12 months and tally all the deals that have been finalised in the local market, it is likely the total value of investment transaction will still surpass the £250 million mark, marking an improvement on 2016.
Of course, this figure has been significantly boosted by the £125m sum paid by Holywood-based property asset management firm Wirefox for CastleCourt in Belfast city centre. Activity in the retail market made up the majority of the investments volumes in a year which also saw the sale of two Tesco stores in Newry and Craigavon. The retail sector is particularly buoyant in the border regions, where shoppers from the Republic of Ireland continue to head north to avail of the favourable exchange rate.
2018 will also see a number of high-profile new office openings in Belfast, such as Causeway Asset Management’s Chichester House, which will be the first property in the city with a WiredScore certification - the internationally-recognised scheme for rating the digital connectivity of commercial property.
It is a trend we expect to gather further momentum this year as developers aim to ‘future fit’ offices to appeal to the new wave of technology firms and foreign direct investors.
After a slow start in 2017, the take-up of office space in Belfast increased considerably in the third quarter, amounting to more than 91,000 sq ft in the three-month period. We anticipate that momentum will have continued into the latter part of the year, boosted by business advisory firm Grant Thornton’s move to new offices at the newly-branded DSW building on Donegall Square West.
On the political stage, there will no doubt be many more twists and turns to come during 2018. While a return of the Northern Ireland Executive, clarity around an open border and progression on a positive trade deal post-Brexit would certainly boost investor intentions, the wheels of the commercial property market will continue to turn regardless.