Investment volume in Q3 in Northern Ireland stood at £19.4m, the lowest quarterly volume since Q1 2018, however that figure was dominated by activity in the retail sector which showed signs of improvement with transactions totalling £19.0m, according to our new research published today.

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The Investment Transactions Northern Ireland Bulletin Q3 2019 showed that volume stood 64 percent below the same period in 2018 and 71 percent below the five-year quarterly average.

The largest deal this quarter was Columbia Threadneedle’s sale of Clandeboye Retail Park in Bangor to Harry Corry Pension Fund for £8.7m (NIY 13.50 percent).

Year to date investment volume stands at £124.0m, 2 percent above the same period of 2018.

The return of retail volume in Q3 was further boosted by Wetherspoon’s purchase of Revolución de Cuba in Belfast for £3.3m. Other high street investments also featured with private local investors purchasing 23-29 Queen Street in Belfast for £950,000 and 40-46 Bow Street in Lisburn for £850,000 (NIY 6.75 percent).

The only non-retail deal of Q3, was the purchase of City Business Park in Dunmurry for £479,000 (NIY 8.98 percent) by a private Northern Irish investor.

Year to date, the primary investor type has been owner occupiers, accounting for half of volume and mostly contributed to Citibank’s purchase of the Gateway building in Q2.

This quarter saw the second largest transaction by an institutional purchaser this year with Harry Corry Pension Fund’s purchase of Clandeboye Retail Park.

As usual, private Northern Irish investors continue to be the most active investor type. Over half of transactions this year involved a local purchaser and accounted for over a quarter of volume at £31.9m.

Martin McCloy, director of capital markets, Lambert Smith Hampton, said:

“Q3 volume was not the expected return to form for the Northern Irish investment market. Activity in the final quarter is expected to be significantly stronger with over £31m worth of deals already completed in the first three weeks of October, including the sale of Crescent Link Retail Park in the largest retail transaction since 2017, and over £30.0m of deals agreed.

“Retail activity is expected to dominate the latter half of 2019 and has the potential to retain its position as dominant asset class should Sprucefield Retail Park also be sold in Q4, breaking the dominant run of the office sector year to date. That said, city centre office investments remain the most in demand asset class due to the continued strength of the office occupier market. We expect that the annual total for 2019 will exceed the £210m mark, exceeding both 2018 volume and the ten year annual average.”

He added: “Over the last three years, the Northern Irish investment market has been slowed by a combination of local and national political uncertainty. While there is evidence that investor activity has declined post-referendum, the market is not in as poor a condition as activity may suggest and demand for commercial property remains.”

Download full report here.