The company’s latest Investment Transactions Northern Ireland (ITNI) report shows investment volume totalled £122.7m in Q3, more than three times the figure for Q2 and 78% above the five-year quarterly average. 

Click here to download a copy of the report. 

While the number of transactions during the quarter was below trend, growth was driven by the acquisition of several major retail schemes completing during the period, leading to the largest volume of retail transactions since Q3 2017.

Forestside Shopping Centre, Belfast, the largest single Q3 transaction, was purchased by Mussenden Properties Limited, a vehicle for a local private investor, for £42.0m from Kildare Partners. Foyleside Shopping Centre, Derry~Londonderry, was purchased by a consortium of local investors for £27.0m also from Kildare Partners. Abbey Retail Park, Newtownabbey, was purchased by Realty Income Corporation for approximately £40.0m from Slate Asset Management. 

As a results of these deals, retail accounted for almost 99% of volume in the quarter, signalling renewed investor interest in the sector. 

While retail investment is showing signs of recovery, investment volume in the office sector was subdued at £1.5m, 91% below the five-year quarterly average. The key deal was the purchase of 16 Wellington Park for £1.0m by a local investor. 

No transactions were reported in the industrial sector, although six properties are currently agreed and expected to complete before the end of the year. 

In total, year-to-date total investment volume stands at £289.5m, 52% above the five-year Q1-Q3 average and 66% above the same period in 2022. 

Jonathan Martin, Director at Lambert Smith Hampton, said: “Local investors are the mainstay of the Northern Irish investment market. The economic landscape has led to a shift in investor trends, with local investors now not only the most active, but also accounting for the largest proportion of investment volume. 
“Rebased retail rents and attractive double-digit yields have brought shopping centres back into focus for investors. The final quarter of 2023 is expected to be subdued, when compared with Q3, and we are tracking approximately £20m of deals either agreed or in legals. Investors remain keen to deploy capital and the stabilisation of interest rates will undoubtedly increase investor confidence as we move into the final quarter.” 

Claire Shaw, Senior Research Analyst at Lambert Smith Hampton, said: “While annual volume for 2023 will be ahead of trend, new supply to the market has slowed to a trickle. 

“On the upside, the sale of the recently completed purpose-built student accommodation scheme on Bruce Street* demonstrates that investor appetite remains buoyant for prime assets within the living sector. And while economic headwinds continue to create challenges, the easing of inflationary pressures and the likely stabilising of interest rates should increase confidence in potential vendors who may capitalise on the current supply issues.”