Upload
lisneybelfast
View
217
Download
1
Embed Size (px)
DESCRIPTION
Meticulous property market research makes us better prepared. As Lisney has extensive agency and advisory services departments we can provide our clients with deep insight, extensive coverage and informed knowledge of the market. That means we can produce intelligent, independent property market research. In fact, we pride ourselves on the quality of the research we produce and we know it gives Lisney clients better information on which to make important decisions. We maintain some of the most comprehensive and accurate databases of market information. We’ve kept many records since 1960 and so, unlike anyone else, we can provide long-term time-series analyses of various sectors.
Citation preview
Your Property. Our Business.
QUARTERONE2016
www.lisney.com
CONTENTS
Int roduct ion03
Table of contents
Investment04
Notable Investment Transact ions07
Current ly On The Market07
Off ice08
Notable Off ice Take-Up09
Retai l10
Industr ia l12
The Team Behind The Research14
INTRODUCTION
Quarter 1 2016
Investment t ransact ions and Cerberus
sel l ing out thei r loan book have dr iven the
market in the f i rst Quarter of 2016.
Cerberus have been part icular ly act ive in
this period agreeing the 15 acre Sirocco
Site opposite the Waterfront hall, the Castlebawn
development s i te in Newtownards, the
long awaited Royal Exchange development
s i te in Bel fast c i ty Centre and a number
of s igni f icant res ident ia l s i tes in North
Down and Londonderry.
Cerberus have been
particularly active in this period selling
the 15 acre Sirocco Site
3
Lisney’s Q4 update reported an opt imist ic
out look for the NI investment market in
2016 with susta ined t ransact ion volumes
dr iven by increasing investor sent iment
and th is has come to f ru i t ion in the f i rst
Quarter of 2016.
A number of s igni f icant t ransact ions
have led to investment volumes reaching
£120m, with a fur ther £140m current ly on
the market inc luding Cit i Group’s Bel fast
HQ in Gateway Off ices, Damol ly Reta i l
Park and the Br i t ish Land Port fo l io , made
up of L isnagelv in SC, Rivers ide Reta i l
Park and Tesco Craigavon.
Brexit Looms
INVESTMENT
Q1 2016
STRONG TRANSACTION
VOLUMES
SUSTAINED DEMAND
BREXIT MAY STALL Q2
INVESTMENT ACTIVITY
DECLAN FLYNN,
MD, LISNEY NI
Declan Flynn joined Lisney in 1992 and was appo in ted Managing Director in 2002.
He is a Member of the RICS and has over 20 years commercia l property exper ience.
Fol lowing h is appointment as Managing Director he expanded the business most notably in the area of asset management across the UK.
Declan is involved in a l l aspects of the businessfocusing pr imar i ly onbusiness development .
The most significant new entrant to our market has been Tristan Capital
5
1.9%2016
IMF FORECAST FOR UK GROWTH
Cut f rom prev iously forecast
f igure of 2.2%
3.2%2016
IMF FORECAST FOR GLOBAL GROWTH
Cut f rom prev iously forecast
f igure of 3.4%
INVESTMENT
Q1 2016
Although Q1 investment volumes have
remained strong, we expect the number
of investment t ransact ions to decl ine in
Q2 before recover ing towards the end
of the year .
The focus for the next few months wi l l
be on “BREXIT” and the EU referendum
and we expect that most investors wi l l
take stock and await the outcome of
both votes and local e lect ions before
making fur ther investment decis ions.
Research from Oxford Economics indicates
that the NI economy may be more
vulnerable to the type of st ructura l
changes which a UK ex i t f rom the EU
would encompass, compared to the rest
of the UK and i t remains to be seen what
impact th is will have on levels of Foreign
Direct Investment.
As a consequence of the ongoing
economic uncerta inty, the Internat ional
Monetary Fund has cut i ts forecast for
UK growth th is year to 1.9%, f rom the
2.2% i t forecast prev iously.
In a s imi lar instance, the IMF’s forecast
for g lobal growth was cut to 3.2% from
3.4%. This suggests that a Brex i t could
have severe impl icat ions not only
regional ly, but a lso on a global scale .
On a more posi t ive note, UK inf lat ion h i t
i ts h ighest rate in 15 months in March,
wi th the Consumer Pr ice Index r is ing by
0.5% and core inf lat ion to 1.5%.
With th is in mind, a preferable outcome
to the EU Referendum buoyed by a
strengthening UK market may have some
posi t ive connotat ions for Northern
I re land moving forward.
INCOME SECTOR £M NIY/£PSF* PURCHASER
The Outlet & Junction One Open Retail Park 32.0 9.0% The Lotus Group With
Tristan Capital
Bloomfield Shopping Centre Shopping Centre 54.15 7.66% Ellandi & Tristan Capital
Capital House. Office 11.0 8.1% Melcorpo
Donegall Square North Office 5.95 £218 PSF Private Investor
River House Office 7.0 £80 PSF Mercer Real Estate
Oxford House & Gloucester House Office 7.75 9.5% Wirefox
NOTABLE INVESTMENTTRANSACTIONS
Q1 2016
CURRENTLY ON THE MARKET
Q1 2016
*Where NIY is unavailable for vacant property £PSF has been provided.
PROPERTY SECTOR ASKINGPRICE £M
STATUSNIY
Lisnagelvin Shopping Centre Shopping Centre 17.2 Under Offer6.9%
Damolly Retail Park Part Open Retail Park 33.5 Agreed6.89%
Downe Retail Park Open Retail Park 17.0 Available6.75%
Gateway Offices Office 29.0 Under Offer6.5%
Shaftesbury Square & Bow Street Office/High Street 9.1 Sale Agreed5.8%
Riverside Shopping Centre Shopping Centre 14.32 Available6.78%
7
The tone of the NI of f ice market in 2015
was restr icted supply of Grade A stock
result ing in an inabi l i ty to service demand
and th is has been compounded fur ther
in the f i rst Quarter of 2016.
Take up of of f ice space reached ci rca
160,00sq f t . in Q1, the major i ty of which
was made up of refurbished ex ist ing
OFFICE
Q1 2016
FURTHER DECREASE
IN SUPPLY
SUSTAINED DEMAND
STRONG
REDEVELOPMENT
PIPELINE
Take up has reached c.160,000 sq ft in Q1 2016
8
This will put further pressure on rents which have been risingspace, rather than new bui lds and in the
absence of new developments coming to
the market , the gap between demand and
supply wi l l undoubtedly lengthen.
We are aware of a number of active requirements
which the current supply cannot fu l f i l ,
notably that of HMRC which is seeking
100,000 sq f t . of Grade A space.
This wi l l put fur ther pressure on rents
which have been steadi ly r is ing s ince
2014, a notable example of where rents
have gott to is the Ki lmona regear of the
Allstate lease in Lanyon place at a headline
f igure of £20 per sq f t .
As a resul t of the lack of supply we are
also seeing more landlord fr iendly lease
terms with incentive packages lessening
and the gap between headl ine and net
ef fect ive rents t ightening.
Al though current supply is l imi ted, the
out look for the medium term is relat ively
posi t ive wi th developers focussing on
redevelopment/refurbishment projects
in an at tempt to del iver much needed
new space.
Ki lmona Holdings and Mc Aleer & Rushe
are set to be act ive in th is space with
p lanning permission appl ied for on a
number of c i ty Centre Si tes.
OCCUPIER SIZE (SQ FT) LOCATION
DSD 22,727 Cleaver House, Donegall Square North, Belfast
Belfast Telegraph 17,506 Clarendon Dock, Belfast
Navi Net 15,500 Northern Ireland Science Park, Belfast
NBC Universal T/A BRS Golf 10,173 City Quays, Belfast
NIE 10,000 Old Channel Road, Belfast
NOTABLE OFFICE TAKE-UP
Q1 2016
Liberty IT 26,000 Adelaide Exchange, Adelaide Street, Belfast
9
Demand cont inues to be strong for
pr ime City Centre reta i l p i tches as
ev idenced recent ly by L i festy le Sports
leasing c. 8,000 sq f t . of space in
Victor ia Square SC which was
prev iously occupied by Bank Fashion.
We are a lso aware of a number of
other occupiers wi th e i ther act ive
requirements or deals current ly in
legals .
RETAIL
Q1 2016
PRIME CITY CENTRE
PERFORMING STRONGLY
VACANCY RATES
DECLINING FURTHER
ZONE A RENTS
TRENDING UPWARDS
TOWARDS £150 PSF
Prime rents on Donegall Place are trending uptowards£150 psf
10
With vacancy rates declining, we expect
pr ime rents to cont inue t rending
upwards and Zone A to reach £150
per sq f t on Donegal Place.
This in turn may have a posi t ive impact
on secondary locat ions as reta i lers
look towards the per iphery of the City
Centre in search of sui table space.
As a resul t of Tr istan Capita l ’s recent
spending spree and thei r act ive asset
management we are aware of a number
of ongoing deals wi th in thei r schemes
to UK retai lers
Moving forward we expect pr ime locat ions
to carry on performing strongly wi th
secondary p i tches benef i t t ing as a resul t
and regional towns to cont inue thei r s low
rev iva l .
Prime rents on Donegall Place are trending uptowards£150 psf
11
LIMITED SUPPLY
SUSTAINED DEMAND
UPWARDS PRESSURE
ON RENTS TOWARDS
FEASIBLE DEVELOPMENT
LEVELS
Low levels of t ransact ional act iv i ty in 2015 have
continued into Q1 of 2016 and this is being
driven on the supply side by the lack of availabil ity
space, part icular ly over 50,000sq f t
On the demand s ide low oi l and commodity
pr ices are causing a weakness in demand f rom
manufacturers .
The net resul t of both means very few
transact ions of note complet ing in the f i rst
Quarter of 2016
With weak demand current ly outstr ipping l imi ted
supply, many operators are undertaking design and
build projects in order to meet their requirements.
INDUSTRIAL
Q1 2016
Low oil and commodityprices are causing a weakness in demand
12
This is ev idenced by aerospace
manufacturer RLC expanding its operation
to the Langford Lodge s i te in Cruml in ,
a £35m project which is being back by
Invest NI to the tune of £6.5m.
In addi t ion to RLC and despi te recent
developments with firms such as Bombardier,
there is a strong appetite from companies
operat ing in the aerospace industry for
good qual i ty space and we expect th is
t rend to cont inue.
In the short term, the trend of decreasing
avai labi l i ty is l ike ly to cont inue with few
opportuni t ies becoming avai lable .
In the medium to long term, we expect
pressure on renta l va lues to cont inue
pushing them towards viable speculative
development levels of £5 per sq f t .
making f inance more readi ly avai lable .
THE TEAM
Behind the research
NICKY FINNIESTON
Director(Retai l & Investment)
STEPHEN CHAMBERS
Associate Director( Investment & Finance)
ANDREW GAWLEY
Associate Director(Agency)
DECLAN FLYNN
Managing Director
AOIFE BRENNAN
Divis ional Director(Research Div is ion)
TANYA DUFFY
Property Researcher(Research Div is ion)
14
Your Property. Our Business.
1st Floor Montgomery House
29-33 Montgomery Street, Belfast, BT1 4NX
028 9050 1501
LISNEY NORTHERN IRELAND
www.lisney.com