Retail dominant in Northern Ireland as commercial investments hit £338m

Retail was the dominant force in Northern Ireland in 2023 as the commercial investment sector recorded total investment volumes of £338m.

According to data from CBRE Northern Ireland, the retail sector accounted for 67% of the total spend, followed by offices which represented 18%.

The year’s investment sales were accumulated across 31 transactions, and exceeded 2022’s total of £330m. 2023 also represented the investment sector’s strongest year since 2015.

Highlights included the sales of Rushmere Shopping Centre Retail Park in Craigavon for £46.5m; Forestside Shopping Centre in Belfast for £42m; Abbey Retail Park in Newtonabbey for £40.6m; and Foyleside Shopping Centre in Londonderry for £27m.

Domestic investors comprised 74% of the market share, whilst institutional investors and property companies represented 24% and 2%, respectively.

Gavin Elliott, senior director at CBRE NI, said: “2023 has been a positive year with reference to investment sale volumes and we expect 2024 will see improved real estate performance supported by declining UK inflation rates and a stabilisation in long-term interest rates.

“Yields and capital values have already begun to stabilise in some sectors, and occupier markets are still driving rental growth particularly in the residential, student and industrial sectors.

“As interest rates may constrain funders’ willingness to lend, there is a potential market opportunity for cash-rich investors to acquire quality commercial real estate assets and implement counter-cyclical investment strategies.

“Indeed during 2023, investors gravitated towards value-add opportunities which offered higher yields with limited availability of debt, this is illustrated by the shopping centre sector which accounted for over 36% of the total investment spend during the year.

“The unique position of Northern Ireland, with access to both UK and European markets through the Windsor Framework, continues to present an opportunity for further substantial growth in the investment sector, and wider commercial property market in 2024.

“However, as we have previously stated over the last 18 months, it is imperative that Stormont is restored in order to fully realise these opportunities.”