Property market report

NI Commercial Property Investment Subdued In Q3

Andrew Kelly Corporate

Commercial property investment in the third quarter of 2018 remained subdued with volume recorded at £53.2m, according to Lambert Smith Hampton’s latest Investment Transactions Northern Ireland report.

The ITNI Bulletin Q3 2018 reports that year-to-date total investment volume stands at £121m, a decrease of 52 percent on the same period in 2017. While investor appetite has improved, Q3 activity overall remained low at 38 percent below the five-year quarterly average.

On the upside, the latest quarter did see the first office investments of 2018. With a combined value of £39.4m, three assets changed hands in Belfast city centre, accounting for 74 percent of the quarterly volume. These included the Metro Building for £21.8m (NIY 5.75%), Obel 68 for £15.2m (NIY 6.73%) and 20 Adelaide Street for £2.4m (NIY 7.20%).

The two largest deals of the quarter were by a local property company and Belfast Harbour Commissioners.  Private Northern Irish investors were very active and this group is responsible for the largest proportion of investment volume in the year-to-date.

Martin McCloy, director of capital markets at Lambert Smith Hampton, said:

“Although subdued in comparison to recent years, investment has remained resilient in the face of the political and economic headwinds of the last two years.  We anticipate that Q4 will follow the same trend as the two previous quarters, with £20m of deals currently agreed or in legals.

“Investor appetite remains and investors are taking advantage where clear value can be found with quality assets quickly being agreed.”

He added: “The uncertainty continues regarding the exact detail of the withdrawal and future relationship agreements between the UK and EU. A blueprint for the future trade and security partnership should further increase confidence amongst investors and the commercial property market.”

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