Belfast’s construction rate bucks the trend in a challenging sector
Belfast city centre is currently experiencing one of the longest and most exciting periods of construction activity in recent decades. Despite a lack of investment in key infrastructure projects in Northern Ireland, tower cranes dominate the skyline as buildings rise to ever increasing heights and densities and land uses compete for limited site availability in the private sector.
So how did it start and how long will it run? This is a question frequently asked by developers, banks, planners and occupiers.
It is probably fair to say the sharp and deep recessionary period following the crash of 2008 led to a complete cessation of activity where bank lending was non-existent and commercial confidence diminished.
Occupiers looked hard at their space requirements and expansion and relocation plans became shelved and short-term lets were the order of the day.
While it is difficult to say what relit the flame, the proposed development of the Ulster University on York Street had to be a major factor. As developers retracted, the university assembled its campus site throughout the recession years and plans were conceived for what is to become the city’s second university campus. Along with the new campus came the student accommodation schemes mainly built by specialist developers based offshore.
I believe it is also testament to the good work of Ulster University and Queen’s University that the sleeping office sector in the city centre finally woke up as graduates in the technology sector, business, engineering and law became prime pickings for international companies such as Citibank and Allstate, delighted not only to have quality staff but prime property at relatively low occupational costs.
This not only resulted in the market bringing forward new office builds in the city, but also diligent refurbishment projects such as River House, Linen Loft and Flax House.
Indeed, the most recent Royal Institution of Chartered Surveyors and Ulster Bank Commercial Market Survey for Q2 of 2018 shows bright spots in the office sector with rises in occupier demand, three-month rent expectations and three months capital value expectations.
Add to these new and refurbished builds, the long list of new hotels, either opened or under construction, and it is evident that Belfast is a rapidly changing place when, in a five-year period of stability and recovery, more development has taken place than in the leading years of the property boom from 2003 to 2008.
So will the growth in the city centre sustain?
The pessimists who are always with us might say we have too many student rooms, too many hotel bedrooms, no government and Brexit just around the corner, with serious issues.
Others, on the contrary, point to a much undeveloped private rented sector, monstrous demand for inner city social housing and an increasingly employable workforce.
On balance, I see a market playing catch-up following not only the years of recession and inactivity, but a period when sites and buildings were traded as opposed to developed.
Unlike the previous boom, the current activity is built on strong and tangible occupier demand.
Keeping the flame lit, however, will require the development industry being able to acquire funding, the city further regenerating, the emerging development plans and some almost forgotten politicians back in their seats at Stormont.
River House has been refurbished