With Belfast’s vacant office space down to just five per cent, demands are gathering pace for the Northern Ireland government to step in with commercial development cash.
Currently the city has just 900,000sq ft of empty offices, but less than a quarter of that is air-conditioned and fully-fitted Grade A space. What’s left is either too old or too small. Now Invest NI – the body charged with promoting inward investment to the province — has launched a review to determine the need for government intervention.
“If we are not at crisis point we are certainly very close to it,” said David McNellis, of commercial agents Lisney. Unless Northern Ireland can show a competitive edge it has no chance of attracting companies to the city he added.
News of the agency’s review comes just days after separate claims that since the 2013 turning point an increasing number of companies are relocating to Northern Ireland or expanding within the province. And with speculative building yet to restart businesses are scrambling to grab the few prime sites available.
“Many high profile premises are coming to the market and Belfast city centre in particular is looking much more healthy with the office sector powering ahead,” said property consultants McConnells.
“The office occupancy for Belfast is 50 per cent higher than 2012, but despite this apparent boom, city centre office space is now at ‘critical levels’. There is precious little speculative building in the pipeline and what is available is being snapped up very quickly indeed.”
Demand is strong from both indigenous companies and expanding foreign direct investment, with Belfast’s Titanic Quarter looking particularly attractive for the IT and legal sector. McConnells itself took up 4,000sq ft of the recently expanded former ship building site. Other new tenants included the Citi Group which signed for 20,000sq ft, Arthur Cox which took 17,500sq ft at Victoria House on Gloucester Street, and Concentrix which expanded into a further 30,000sq ft of secondary space in River House.
Although Invest NI does not have a remit to build or develop office property, it has been in “extensive” discussions with Belfast Harbour Commissioners over its plans to build a £10m, five-storey office building at City Quays. And work has already begun on a 20,000sq ft Linfield Properties office project at nearby Weavers Court.
By far the biggest project for the revival the east Belfast area is Titanic Quarter Ltd’s £20m plan for a 600,000sq ft financial services centre. It has lodged a planning application for what it describes as the “largest new commercial development” for Belfast since the banking crisis began in 2007.
But the shortage will get far worse before there is any sign of improvement, warns McConnells, citing the University of Ulster’s announcement that it has secured a loan from the European Investment Bank to cover half of a £300m campus expansion project.
With at least 15,000 students expected to attend the university by 2018 the need for low-cost housing will only grow. Permission has already been granted to allow the conversion a redundant 12,000sq ft office building to student accommodation.
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