French developer Stargime has completed its fourth acquisition of potential office space in Belfast, it has emerged.
The Paris firm snapped up Graham House in Albert Square in the city – close to the Royal Mail headquarters at Tomb Street – towards the end of last year.
Commercial property agents McConnell confirmed their client’s deal today in a market round-up for 2015.
And rival agents CBRE predicted that activity would pick up between now and March after 2015 saw a lower-than-expected £400m worth of deals.
McConnell said the year had been “encouraging” but that the overall flow of property coming onto the market in 2015 had not been as strong as hoped for.
But director Rory McConnell added: “Opportunities which do become available continue to find willing buyers, and competitive bidding is once again the norm.”
It acted for Stargime in the acquisition of Graham House, which could deliver up to 80,000 sq ft of Grade A office space.
Stargime already owns Artola House as well as Arthur House, home of retailer Avoca – and it’s also bought a former First Trust building at Queens Square.
CBRE said retail investment had been the busiest sector of the year, accounting for nearly 70% of deals, with offices accounting for the remainder.
Retail highlights included the sale of high-profile shopping centres Erneside in Enniskillen, off-loaded by Diageo Pension Trust to a joint venture of Ellandi and Tristan for £34.25m.
Corbo Properties also disposed of Fairhill in Ballymena for £45.8m, selling to UK-based fund Rockspring.
Ellandi and Tristan also snapped up Bloomfield in Bangor, formerly owned by Michael Herbert, after it was sold by receivers for around £54m.
And Lisnagevlin Retail Park was sold to M&G Real Estate for £16.7m.
Robert Ditty, senior director at CBRE, said retail had been the most sought-after sector during a year in which activity had been weaker than anticipated.
“A number of deals were delayed and are currently going through legals, meaning that quarter one should see a significant amount of investment activity.”
Mr Ditty said the firm anticipated that some assets and portfolios which were bought over the last few years, could be sold on.
That was because private equity firms – many of which acquired property from bank sales – would be seeking to maximise their profits.
He said there was likely to be more debt funding around for income-producing investment properties in the next year. But funding for speculative development would remain thin on the ground.
Mr McConnell said transactions during 2015 showed there was a “glimmer of light” for office developments. He cited Hastings Hotels’ Grand Central hotel project at the former Windsor House, which will also include five floors of office space, as well as the Grade A office plans of Stargime.
But Stargime’s plans to add an 80,000 sq ft office building to the former First Trust at Queens Square have run into difficulty. As revealed in the Belfast Telegraph yesterday, a report has raised “considerable disadvantages” with the proposal.
70%
The percentage of investment carried out in the retail sector
£34.25m
Value of deal for the sale of Erneside centre
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