News - Northern Ireland

2015 NI Commercial Property Report reveals investment and retail as real winners of 2015

The number of Investment transactions in the Northern Irish property market doubled in 2015 as volumes hit £420 million, new research by leading Belfast-based property agents Lisney has revealed.

The findings were announced today as the 2015 Northern Ireland Commercial Property Report was launched. Compiled by Lisney, the report is the most comprehensive and long-established study of the commercial property market in Northern Ireland across the investment, retail, office and industrial sectors.

The report revealed that the retail sector is strengthening, with prime retailing locations throughout Northern Ireland having enjoyed their first fall in vacancy rates last year since 2011. However, the findings for the office and industrial markets paints a less positive picture.

Looking ahead, Lisney predicts that the Northern Ireland commercial property market will sustain its resurgence during 2016 and be strengthened further by ever-improving consumer confidence.

Headline results from the report reveal that:

• The number of investment transactions doubled in 2015 showing a move away from large portfolio sales as the market normalised.
• The volume of transactions hit £420m at the end of 2015
• A further £100m of transactions in legals at end 2015 and £70m of property on the market indicates an active start to 2016.
• Whilst retail vacancy rates still lag behind the rest of the UK, prime town centre and out of town retail locations returned the lowest vacancy levels recorded since 2011.
• Prime Retail vacancy rates fell by 2.5%, from 17.1% in 2014 to 14.6% in 2015.
• Take Up in the Grade A office market has finally stalled due to a lack of availability
• Industrial availability is at an all-time low gradually forcing an increase in rent

Two of the most prominent deals during the year were the purchases of Fairhill Shopping Centre in Ballymena by Rockspring and of Erneside Shopping Centre in Enniskillen by Ellandi with Tristan Capital, for £45.6m and £34.5m respectively.

Declan Flynn, Managing Director of Lisney Northern Ireland, which specialises in office, retail, leisure and industrial property acquisition, disposal and investment, commented:

“The knock-on effect of the continuing success of the UK property market has seen a significant increase in the number of investors and developers beginning to sit up and take note of Northern Ireland and what we have to offer.

“This is particularly evident within the retail market, which is being driven by improving consumer confidence, reducing vacancy rates and improving rents.

“A key positive has been the number of new investors in the Northern Ireland market. With Ellandi, Rockspring, M&G and Chenavari taking advantage of the opportunities the region currently offers. It is also notable that the depth of purchaser pool is providing confidence in relation to liquidity in the region.

“The adoption of the rates revaluation has also delivered much-needed help to high streets and the main shopping areas, which has had a positive effect on occupancy levels within these areas.

“The higher number of investment transactions in 2015 indicates a return to a more normalised transactional environment less focused on wholesale bank deleveraging, which saw numerous portfolios dominate the market last year.

“Lisney’s own Investment department has transacted in excess of £150m in the last year”

Commenting on the office market and the challenges faced by the industrial sector, Mr Flynn continued:

“Unfortunately 2015 will be remembered as the year when take up in the Northern Ireland office market stalled, largely due to a supply failure.

“With a severe shortage of Grade A stock headline rents can only go up which will encourage new office developments.

“In the absence of this Grade A office stock, 2016 will see investors and developers continue to chase older vacant buildings with a view to refurbishing the office space or potentially changing the use - for example, office to hotel, or office to student housing. This will remain the case until rents reach a viable development level.

“The industrial sector remains challenging, with a shortage of good quality accommodation and viable developments some way off. This is presenting a problem for new entrants looking for suitable premises available for immediate occupation.”

Looking ahead, Mr Flynn added:“We have already seen significant activity within the local investment markets this year and I expect Northern Ireland will remain firmly on the radars of local and national investors throughout 2016.

“The reduction of Corporation Tax in 2018 has the potential to fuel further growth in our market, and certainly ticks important boxes in meeting the needs of global employers. It takes Northern Ireland’s appeal to international investors to a new level and is an important opportunity that must be grasped with both hands.

“The Commercial Property market in 2016 will continue to accommodate many moving parts across all sectors and the next 12-18 months will present a number of opportunities for international investors, but also local investors as finance becomes more accessible.”

The principal findings of Lisney’s 2015 Northern Ireland Commercial Property Report highlight:


• Take up in the Grade A office market has finally stalled due to a lack of availability. This will result in rents increasing throughout 2016 and bring forward viable development in this sector.

Office Take Up :
2012 265,000 sq ft
2013 400,000 sq ft
2014 350,000 sq ft
2015 210,000 sq ft

• Supply of Grade A stock remains restricted at approximately 150,000 sq ft with virtually no new, previously unoccupied space available in the city centre core

• This restricted supply is likely to continue for the next 12/18 months.

• At £15.50 per sq ft, Belfast office rents are still lagging behind cities such as Dublin (£40 per sq ft), Glasgow (£29.50 per sq ft) and Cardiff (£22 per sq ft).

• Belfast office rents are still competitive compared to other cities of a similar size.

• Lisney is predicting that rents could rise to £17/18 per sq ft during 2016

• Notable lettings in 2015 included PWC securing c.21,200 sq ft adjacent to its existing presence at Laganbank Road (with the space understood to accommodate a Joint Venture with Google), the acquisition by Whitehat Security of c.9,000 sq ft in The Linenhall Building.



• Prime retailing locations throughout the province recorded their first fall in vacancy
rates since 2011, down 2.5% from 17.1% in 2014 to 14.6% in 2015. This follows a detailed study of 17 towns and cities across Northern Ireland.

• These prime in town figures are still behind average figures in the UK (9.8%) and Scotland (10.6%).

• Belfast City Centre’s prime retail area has experienced a substantial reduction in
vacancy rates, from 19.8% vacancy in 2014 to 12.5% in 2015. This was the largest fall in vacancy rates since 2011.

• Despite an increase in occupational costs since the rates revaluation, vacancy rates at out of town retailing centres have fallen to 13.4%, down 2.5% from 2014 (15.9%).

• Thus, continued demand and ever-reducing supply will lead to tangible rental growth throughout next year and beyond in the prime retailing locations.


• The number of investment transactions doubled in 2015 showing a move away from large portfolio sales as the market normalised.

• The volume of transactions hit £420m at the end of 2015
Property Investment Volumes in Northern Ireland:
2012 £75 million
2013 £175 million
2014 £450 million
2015 £420 million

• The majority of these transactions have been within the retail sector.

• New entrants to the market include Ellandi, Rockspring, M&G, Chenavari and Tristan Capital.

• The weight of capital in the market has tightened the traditional Northern Ireland yield gap.

• As a result of the volume of re-financing completed in 2015, secondary trades out of these portfolios will emerge as a theme within the next 12 months.

• As new entrants continue to emerge, transaction numbers will be sustained. 2016 will also see ongoing demand, particularly for good quality stock.


• Vacancy rates have decreased for the fourth consecutive year. This is lower than Dublin (15.1%) but still higher than the UK (6.4%) average.

Industrial vacancy rates:

2012 16%

2013 13%

2014 12%

2015 10%

• Mallusk has the highest vacancy rate (15.5%) despite reducing this figure from 24% in 2012. Newry, which has had the lowest vacancy rates for the last three years, has increased availability of 6.4%, up from 4% last year.

• Units of less than 10,000 sq. ft. still comprise the majority of available space. Only one self-contained unit over 50,000 sq. ft. is available in the area surveyed.

• Emergence of film/production companies with demand in the sector still strong.

• Redevelopment at Giant’s Park on the North Foreshore will be home to Northern Ireland’s first cleantech hub.

• Companies such as Lidl and RLC Engineering have been investing in their existing premises as supply remains limited.

 The full reports can be viewed Here


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