Northern Ireland saw major commercial property investment in 2014 – and the prospect of devolution of corporation tax means even better days could be around the corner.
Commercial property agents CBRE’s 2015 Outlook said investment sales of £500m had been concluded in 2014 – while loan sales of £1.7bn had been reached by banks and financial institutions.
The firm’s head of research, Marie Hunt, said values still remained below their peak, which was maintaining the attractiveness of assets to investors.
There were UK institutions in the market, while US investors had also snapped up some prime assets.
And with the devolution of corporation tax now a more realistic prospect following the Stormont House Agreement, better days could be around the corner.
Ms Hunt said: “I have seen at first-hand the benefits lower corporation tax has brought to Dublin and Ireland. There is a long way to go in that debate but I welcome news that it at least was on the table for discussion.”
However, the City Quays development at Belfast Harbour was the only new office development to be in the advanced stages of planning.
Ms Hunt said: “There is a shortage of grade A office space and inevitably the rents will continue to rise.”
She said that between 2010 and 2012, rents per square foot were around £12.50. Now they were expected to reach £16 – increasing, but still a long way off the €45 (£34) per square foot in Dublin.
Such relatively low overheads, along with a low tax rate, would all make Northern Ireland attractive. However, there was also limited bank finance for speculative office development. She said 2014 had also seen a number of new retail entrants, including Joules and Simply Be/Jacamo, and more were expected in 2015.
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