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Research - 06/08/2018

Commercial Property Investment Boosted in Q2

Commercial property investment in the second quarter of 2018 picked up substantially from Q1 and was more than double the same period in 2017 with volume recorded at £54.3m, according to our latest Investment Transactions Northern Ireland report.

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The ITNI Bulletin Q2 2018 reports that year-to-date total investment volume stands at £66.2m, an increase of 45 percent on H1 2017. While there was a significant improvement compared with Q1, activity overall is still some 34 percent below the five-year quarterly average.

Two-fifths of Q2’s deals were in the retail sector including the sale of 40-46 Donegall Place for £16.4m (NIY 7.05%), Strabane Shopping Park for £3.3m (NIY 8.00%) and an Iceland-anchored mixed use investment in Newry for £2.3m (NIY 7.20%).

Q2 saw the return of institutional and propco investor activity in Northern Ireland. The £16.4m Next and Eason building on Donegall Place was purchased by the French asset management company, Corum Asset Management.

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

“As predicted, Q2 activity was boosted by the completion of a number of larger deals and this improving confidence in the market should encourage the release of more stock.”

“The outlook for the next quarter is positive. With around £30m of deals currently agreed or in legals, and a number of higher value assets expected to be agreed in coming weeks, we predict that the £100m mark will be exceeded during Q3. Current availability in Northern Ireland indicates an enhanced supply of quality retail and office properties on the open market.”

He added: “As we get closer to the October 2018 target date for agreement on the shape of the UK/EU relationship after withdrawal, the commercial property market is steadily moving in the right direction. Demand remains for quality assets, overseas investors are examining Northern Ireland’s potential and an improving opportunity exists for vendors.”

 

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