The Belfast office market is facing a boom in the form of accommodation requirements for the new devolved government and large office relocations in the city centre due to the development of a new retail and leisure complex by MDC, the major Dutch developers. Belfast has only recently begun to see speculative office building and improved up-take in the past 18 months. Top rental levels in a small number of offices have only recently reached £14 sterling per sq ft. This compares with Dublin's top rents of around £35 per sq ft.
The prospects for major and almost immediate new office development in the city centre arises from the decision to grant approval to the Dutch developers' MDC for a shopping centre, hotel and leisure complex at Victoria Square. The development is likely to lead to the displacement of government tenants in two of the city's largest office buildings, Dial House, the 11-storey building in Victoria Square and IDB House in Chichester Street. These buildings will be either redeveloped or demolished and rebuilt as part of MDC's plans.
Dial House accommodates a number of Department of Environment and Inland Revenue departments. IDB House is the headquarters of the Industrial Development Board - the North's IDA - and their displacement will provide a major stimulus for new office build, according to local agents.
The new governmental office requirements in the North are already beginning to emerge. Brown McConnell Clark has just let 22,000 sq ft of new office space in the Cathedral Quarter to the new Police Ombudsman office. The ombudsman has taken the entire New Cathedral Building, opposite St Ann's Cathedral. The agents have not released the rental level for the five-storey air-conditioned building, but it is known it is let on a 15-year lease with a 10-year break.
Several major developers have plans for office accommodation for the new government departments. Dunloe Ewart is among those proposing the movement of government offices into areas of the city that suffered urban blight throughout the Troubles. The developers bought the Crumlin Road Court House on a site opposite the Crumlin Road Prison in the north of the city last year. They have been involved in drawing up proposals in the hope that a government department will locate there.
However, Belfast agents agree that the North's planning process, which has been overwhelmed in recent years by the number of out-of-town retail developments, needs major new resources to handle the likely boom in office schemes in the city. Planning for major developments in the North can take up to three years. In some instances, such as the D5 retail park to the east of Belfast, the process can take five years.
Alaistair Dunn, of Lisney's Belfast office said the North's planning system needs to be speeded up by introducing "an element of democratic accountability". He said Belfast's 1989 Urban Area Plan is urgently in need of updating. The timetable for the new Metropolitan Army Plan is six years and, Mr Dunn said, it "will be completely out of touch with reality" by the time it is presented.
"The Planning Service does not have the resources or manpower at present to fast-track this new plan. Speeding up the planning process for major applications and bringing all of the area plans up-to-date is a vital ingredient in providing a positive and attractive environment for inward investors."
In the past year, Belfast commercial agents had begun to worry about the prospects for the office market after the collapse of the Assembly in February. The continuing strength of sterling was also proving a major disincentive to outside investors.
