Northern Ireland property proves popular with investors
Savills Northern Ireland has released a new market study for 2023. According to the report, property investment in Northern Ireland totalled £334 million. This figure was a record high for the sector since 2017. It was significantly higher than the average investment of £262m over the last five years.
Analysis of the Northern Ireland property market
The most attractive segment of the country’s market was retail property. The volume of investment here amounted to £214.2 million (64% of the total investment in Irish property).
According to Ben Tertle, head of Savills, the market has been encouraging despite many obstacles. Participants have had to adapt to new conditions, which include:
– high levels of inflation;
– rising interest rates;
– investor caution.
It is worth noting that Northern Ireland has coped admirably with the challenges. Meanwhile, elsewhere, office prices have continued to fall. Here, they have remained broadly stable. At the same time, demand for prime options remained relatively strong while supply remained limited.
Total deal value in the industrial and logistics sector was £28.3 million. However, analysts noted less activity in this sector than in others. One of the main reasons given was the limited number of high-demand opportunities.
The main players in the market were Irish investors. This trend is a logical consequence of the UK’s exit from the European Union. Before Brexit, the main share of transactions fell to buyers from other countries. Now, they are less active. Global processes are exacerbated by this, forcing investors to be more cautious.
Other market players have taken the place of institutional investors, such as:
– companies operating in the property sector;
– entrepreneurs with significant capital;
– private investors looking for high yield opportunities.
In the Belfast office sector, 53 deals totalled 261,500 sq ft of space in 2023. As Savills notes, the amount of space on the market has reduced, but the number of sales has remained stable.
Forecasts and outlook
The company predicts that market activity will remain high. One driver will be refinancing schemes. Such initiatives widen the opportunities for investors to buy property, and as a result, the local market will continue to develop.
Savills expects an increase in demand for office space. Moreover, deals initiated in the previous period will be completed in 2024. Increased demand for property is helping to drive up rents. Analysts believe that Grade A office rents will rise to £30 per square metre, up from GBP 25-27 per square metre now.