CastleCourt Belfast
24 January 2018

Sale of Belfasts CastleCourt boosts Northern Irelands commercial property market


The multi-million-pound sale of CastleCourt shopping centre has considerably boosted Northern Ireland’s commercial property market.

Belfast’s popular CastleCourt Shopping Centre was purchased by Co. Down investment firm Wirefox at £123 million last July.

New research has suggested that this transaction, which was among the biggest in recent years, was a key factor in the commercial property market finishing 2017 in a strong position.

The total investment volume figure was £340.9 million, an increase of 24% on the previous year and just above the five-year average.

Neil McShane, director of the capital markets division at Lambert Smith Hampton, which studied the market, said: “The 2017 figures overall demonstrate the continued attractiveness of the Northern Irish investment market to a variety of investors.

“However, they also reveal the mixed picture between sectors. The retail sector was considerably boosted by one deal and the office performance was consistent with 2016. On the other hand, the industrial and alternative sectors are growing steadily.”

Almost £231 million of retail assets swapped hands during last year, dominating the market.

Other key transactions included the sale of Tesco Extra in Newry for £27.7 million, the purchase of Tesco in Craigavon for £21.4 million and the £11.1 million transaction for Valley Retail Park in Newtownabbey.

Supermarket chain Iceland also had five stores sold during 2017 that ranged from £700,000 to £1.3 million.

2017 also seen a change in previous trends as demand for specialist long-leased assets increased with hotels, student accommodation and gyms transacting more frequently.

Over half of investment volume was from property companies who were the most active in 2017.

The distribution of investment across other investor types was fairly similar.

Local private investors were responsible for 15% of investment volume yet as they were accountable for 44 of the 66 deals, they were the most active investor type.

Mr McShane stated: “The investment market has been affected by the significant political and economic challenges of 2017, the Brexit negotiations, the impasse at Stormont and, to a lesser extent, the first interest rate rise in over a decade.

“Consequently, there is a considerable lack of supply, with the number of properties brought to market annually on the decline. While transactions have picked up since early 2017, caution and a flight to quality continue to remain at the forefront of investor sentiment.

“With the first stage of the Brexit negotiations complete, reassurances about the impact on the Irish border and the acclimatisation to the lack of Stormont Executive, we expect that investment activity in 2018 will be more consistent and less turbulent than early 2017.”

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