Numerous retail development plans were postponed last year due to the announcement of the Brexit vote. However, authorities are forecasting that the conclusion of 2017 will see an improvement in activity and sales, a new report has said.
Commercial property firm Colliers believes that retail investment market has decreased by over 50% since 2014 in Northern Ireland.
The market fell to under £250m from £500m in terms of transactions. The firm states that it was “predominantly due to vendor pricing expectations, rather than market fundamentals.”
Many major assets were bought this year. These included the previous home of PC World in Sprucefield. It was on the market for £14m and bought by Aberdeen Asset Management.
The local market has also welcomed a number of new retails, including Freshii, a healthy eating chain restaurant.
Current retailers are also growing, including Hotel Chocolat’s new city centre café and Remus Uomo’s Victoria Square store.
Jonathan Millar, retail director for Colliers in Belfast, states: “The first six months of 2017 have been disappointing in terms of investment sales volumes, and it would be disingenuous to blame lack of stock or poor credit availability.
“The reality is that there is more stock available than in the last 10 years and credit is as cheap as it has ever been.”
“Although 2017 has had a disappointing start, there are currently in the region of £225m of retail investment sales in legals and there is potentially over £200m of retail investments currently available in the market, including Fountain House in Belfast for £14.25m and the Tesco Extra stores in Craigavon and Newry, which have a combined asking price of (around) £50m.”
The report highlighted that there were 36 major commercial property transactions, totaling to approximately £250m in 2016.
Retail investment in Northern Ireland has decreased since 2014, the report uncovered.
Colliers states that this was a year “which saw significant bank deleveraging and thereby setting a high water mark in terms of investment activity.”
In the rental sector, Northern Ireland recorded a rise of 3.9% in the year to the end of April 2017. Colliers believes this was mainly driven by an improvement in Belfast’s Donegall Place.