Northern Ireland’s property investment market rebounds in 2017

Northern Ireland’s property investment market rebounded in 2017, with sales up 25 per cent thanks to the purchase of the Castlecourt Shopping Centre. However, the outlook for further investment will depend on resolving the political impasse at Stormont.

According to a new report from Savills, the number of property investment transactions rose 25 per cent to £325 million (€366 million) in the year, compared with a 50 per cent decline between 2015 and 2016.

However, one large transaction – the £123 million purchase of Castlecourt in Belfast by Wirefox last July – accounted for almost 40 per cent of the annual total.

Ben Turtle, director, Savills NI, said that while 2017 saw a welcome return to “robust investment activity”, without the Castlecourt Shopping Centre deal it would have been a “disappointing” year.

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“Nonetheless, market fundamentals remain strong, with rental and value growth in both retail and office markets, which should continue to attract investor demand,” he added.

Retail assets, inclusive of shopping centres, retail parks, shops and food stores, accounted for 67 per cent 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 Irish consumer economy remains resilient – supported by a robust labour market. Moreover, the northern retail sector has been benefiting from the impact of a weaker sterling, which is attracting shoppers from south of the Border. According to new research by EY, this led to an 8.6 per cent increase in cross-Border shopping, which was valued at an estimated £371 million, in 2017.

However, Savills warned that the region’s ability to attract further investment would depend on resolving the political impasse at Stormont, as well as Brexit.

“The fact that Brexit negotiations have now advanced to phase two discussions on wider-ranging trade arrangements is a positive development,” Mr Turtle said. “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.”

Elsewhere the offices market also performed well in 2017, with £50.3 million worth of sales completed or agreed during the year. However, due to a lack of stock, turnover was somewhat down on the £75 million that traded in 2016.