Quiet summers are nothing new for the commercial property market. Indeed, everyone working in the industry will be well aware of how July in particular is a month which sees very little transactional activity. This summer has been no different, with very few deals being completed or significantly progressed. As we all know, however, July 2016 had a very different context to every preceding year with the historic vote by the UK to leave the European Union at the end of June.
There’s no doubt the referendum result, coming as such a major shock as it seemed to for the majority of the Northern Ireland business community, created an unnecessary hysteria and panic about what the future holds for the local commercial property market.
In the immediate aftermath, those wishing to paint a picture of a market destined for a crash similar to that experienced during the economic recession had plenty of ammunition, given that this July was possibly even quieter than normal.
However, more than a strong hint of normality has returned to the market in recent weeks, with August in particular seeing the business pages of this newspaper and many others reporting a series of deals across a range of sectors which provide evidence that the market is very much alive and well – and set to prosper in the future.
The office market has long been a talking point and research which we have carried out recently points to a sector which is still very lively indeed. It was revealed earlier this month that the General Accident building on Donegall Square South is set to be demolished and replaced with the construction of a new nine-storey office development.
It’s also been reported that property developer Paddy Kearney is planning to develop a series of huge office buildings across the city over the next few years, with his company applying for planning permission to build another new structure at Scottish Amicable at Donegall Square.
These developments will help tackle the great shortage of office space which exists in the city, with demand for Grade A facilities in particular continuing to far outstrip supply. Invest NI is having conversations with potential foreign direct investors, but we need to step up to the mark and deliver new office product – meaning there’s plenty of potential for growth in this sector.
Good news has also engulfed the hotel sector this month, with more than 20 hotel projects currently at various stages of development across Belfast – the most recent of which being work commencing on Northern Ireland’s first ever Marriott hotel at the City Quays development in Belfast Harbour.
The new, £4m Bullitt Hotel is due to open in the city centre in October, while the last fortnight has also seen planning being approved for a four-storey boutique hotel at Bank Square in Belfast city centre and a four-storey extension to the Holiday Inn Express on University Street, which will provide 60 new bedrooms.
The launch of the second phase of luxury, newly-refurbished apartments at the Obel complex in Belfast city centre, the latest stage of a £2m upgrade of Ireland’s tallest building, is a high-profile example of the growth being enjoyed by the residential market. This is confirmed by the latest Northern Ireland House Price Index report revealing that the house price index increased by 3.8% between Q1 and Q2 of 2016.
There are a range of other significant deals in the pipeline which will soon add further to the positive momentum being enjoyed by the local commercial property market.
There’s no denying that the uncertainty in the wake of the Brexit vote did not help the market, but the over-reaction to it has now hopefully ended and we can carry on with business as usual.