£90 Million Worth Of Investment Sales Of Northern Ireland Property
11 October 2010A leading commercial property consultancy is hinting that the market in Northern Ireland is showing signs of recovery. Osborne King has transacted more than £90 million worth of sales during the past 3 months. "The Northern Irish investor market is poised to capitalise on the return of institutional investors," the consultancy said.While the institutions have focused predominantly in Britain, they are also reinvesting in Northern Ireland as evidenced by the recent sale of Damolly Retail Park in Newry to London based Metric Property Investments for £34.9 million, reflecting a net initial yield of 6.25%.
In August the seller of Damolly Retail Park, Corbo Properties, also completed on 48-54 Donegall Place in Belfast. CBRE Investors acquired the 83,000 sq ft property, which is let to Marks & Spencer plc, on behalf of an international institutional investor for £8.75 million, reflecting an initial yield of 5.25%. Scottish Widows Investment Partnership (SWIP) announced that it had purchased Longwood Road Retail Park at Newtownabbey on behalf of Scottish Widows Unit Fund (SWUF Ltd) from Corbo Properties for £48 million. Osborne King represented the vendor in all 3 of these recent sales. These sales show investors are basing acquisition decisions focusing on quality, income producing stock offering stable yields.
"These are extremely significant transactions within the context of the Northern Ireland market and demonstrate clearly that institutional investors are keen to place funds at pricing levels comparable to other UK cities," Andrew Coggins, Investment Director with Osborne King, said. "The fact that fund managers are investing more widely in commercial property is a vital step forward in terms of stimulating the market while also serving to redress the balance between private and institutional investments. This should encourage new inward investment during the coming months. As we approach 2011 the challenge for us will be to continue to build on the momentum of recent sales, encourage new buyers and anticipate that lending institutions free up more commercial reserves for lending into commercial property. We have 2 investment opportunities on the market, Strabane Shopping Park and Laharna Retail Park outside Larne, both of which are town centre Open Class 1 retail parks with a strong tenant line-up offering secure income and development potential, which should prove attractive to potential investors. We also envisage further sales during the last quarter of this year and going into next year as banks seek reductions in their property debt exposure. But by the same token we recognise that institutional investors will continue to be selective in their acquisition of assets and that prices will have to reflect this by being as competitive and realistic as possible."