Declan Flynn, Managing Director of leading estate agents, Lisney, shares his thoughts on activity within the commercial property market in 2014 and outlook for 2015.
How was trading in 2014?
In 2014, trading was very steady with confidence returning across all sectors of the commercial property market. Earlier this year we published the 2014 Lisney Northern Ireland Commercial Property Report, the longest standing and most comprehensive study of the market, which revealed that retail vacancy rates had fallen, investments in 2014 were five times that of transaction values in 2012 and there was continued demand for office accommodation which will likely push rents up in 2015.
What were the highlights/low points of the past year for you?
With the huge volume of loan sales in 2014 including Projects Eagle (NAMA), Achill (Ulster Bank) and the ongoing Aaran (Ulster Bank), there was a lot of activity around loan sales and we were instructed to value a number of these.
The increased activity within the investment market was also a highlight as it resulted in us receiving instructions to place High Street Mall in Portadown and the Richmond Centre in L/Derry on the market.
Were there any particular challenges and how did you overcome them?
The greatest challenge over the last number of years has been the state of the market and how fast it has been changing. These changes can have huge implications on our client activity so it is important we stay one step ahead to plan and prepare for changes within the market.
Are you looking forward to the New Year with optimism?
Absolutely. I believe with the emergence of more and more UK/USA investors in search of investment opportunities and further improved access to capital, 2015 has the potential to be much stronger than 2014. The lack of Grade A office is still a concern but we do expect rents to increase in 2015 as the market continues its recovery.
What do you feel are the prospects for your business in 2015?
The outlook for 2015 across all sectors remains strong with confidence returning and I look forward to the rates revaluation which will help many High Streets and should bring vacancy rates down even further in these locations and really drive the sector forward.
This increasing confidence in retail and office sectors will sustain an appetite from investors which is a very exciting prospect for the market, and local economy.
I would expect that some cranes will have re-appeared to the Belfast skyline as construction on development begins as a result of this increased access to capital and I am sure this is a sight that will again be welcomed by most sectors across Northern Ireland.
Have you any plans for development of your business in 2015?
The above optimism has the potential for an increase in workload and if so, that will require additional staff in 2015.
Are there any barriers to the successful further development of your business, how do you think these could be removed and do you feel the sector in which you operate needs outside support (eg from government or sector bodies) to overcome them?
The devolution of corporation tax powers would be a huge driver of new business in Northern Ireland. I look forward to the passing of this law which should allow the rate to be set by Stormont by April 2017.
A lower rate of Corporation Tax will assist in attracting greater numbers of international companies to Northern Ireland which will further increase the demand for Grade A office space. In order to cater for this come 2017 the plans for development would need to be put in place in the near future.