Northern Ireland’s property investment market rebounded in 2017 with £325m worth of deals – a 25% increase on the previous year. This is according to a new report from Savills Northern Ireland – who transacted 62% of all deals in the year.
The property experts say demand for secure city centre based investments returned in 2017, with the retail sector at the forefront. The report shows that retail assets – inclusive of shopping centres, retail parks, shops and foodstores – accounted for 67% of turnover in the market, with 27 transactions completed or agreed during the year.
According to Savills NI, this reflects the fact that, despite some obvious economic headwinds, the Northern Ireland consumer economy remains resilient – supported by a robust labour market. Unemployment currently stands at 3.9% - considerably lower than the Republic of Ireland’s 6.1% and somewhat lower than the 4.3% unemployment rate in the UK as a whole.
However, Savills NI also note that the impact of weaker Sterling is attracting shoppers from south of the border. Since the Brexit vote in June 2016 the Euro has appreciated by 12.3% against the Pound. And, according to new research by EY, this has led to an 8.6% increase in cross border shopping which is valued at an estimated £371m in 2017.
The offices market also performed well in 2017, with £50.3m of sales completed or agreed during the year, however, due to a lack of stock, turnover was somewhat down on the £75m that traded in 2016. According to Savills, with strong lettings and rental growth over the last two years, it is anticipated that the supply of new office developments will start in earnest next year, which should lead to a substantial increase in investment volumes.
Despite all the positive indicators, Savills note that one large transaction – the £123m purchase of Castlecourt Shopping Centre in Belfast by Wirefox last July – accounted for almost 40% of the annual total.
Commenting on the report, Director at Savills NI, Ben Turtle said, "Northern Ireland’s ability to attract further investment will depend on resolving the political impasse that has resulted in the Stormont assembly being suspended for much of 2017 and, of course, Brexit. The fact that Brexit negotiations have now advanced to phase two discussions on wider ranging trade arrangements is a positive development."
He added, "While there is a long way to go in the negotiations the UK’s pledge to preserve the frictionless border between Northern Ireland and the Republic also arguably nudges the overall outcome towards a softer Brexit which would be economically beneficial to all the home nations."
Source: www.businessworld.ie
