Belfast’s con­struc­tion rate bucks the trend in a chal­leng­ing sec­tor

Belfast Telegraph - Business Telegraph - - News - By­bri­antur­tle Brian Tur­tle MRICS is a mem­ber of the Royal In­sti­tu­tion of Char­tered Sur­vey­ors and a part­ner at com­mer­cial prop­erty agency O’con­nor Kennedy Tur­tle

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

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