Property investment volumes in Northern Ireland stood at £118 million (€140 million) in 2024, representing the weakest performance since 2012, according to figures from property adviser Savills Northern Ireland.
Low levels of activity were primarily driven by higher interest rates remaining at 5.25 per cent for much of the year, the highest level since 2008.
With the Bank of England implementing 50 basis points worth of rate cuts in the latter stages of 2024, investors will be hopeful the rate easing will provide an impetus for greater transactional activity this year, Savills said.
The first quarter was the most active last year, accounting for 47 per cent of total trade following the rollover of agreed deals from the previous year. Retail was the year’s most prominent sector with a total volume of £64.4 million, a market share of 55 per cent.
The largest transaction of the year was the £22.7 million sale of Bloomfield Shopping Centre and Retail Park, Bangor, to Mussenden Properties, which Savills was involved in.
This was followed by Randox’s sale of Central Park, Mallusk, covering 800,000 sq ft of industrial space. Another retail transaction – Quays Shopping Centre, Newry to Urban Green – marked the third-largest deal.
Weakness in the office market was another prominent factor behind the low investment volumes. Investment in the office sector declined 63 per cent compared to the previous year, with a total spend of £23 million across six deals including Savills’ sale of 49-51 Donegall Place and 42-46 Fountain Street to a private local investor for £7 million.
“The majority of lending in 2024 was for refinancing of existing loans, but moving forward we expect the demand to be split more evenly between refinancing and financing for new acquisitions as leverage becomes more attractive,” said Megan Houston, associate director at Savills Northern Ireland.
“Yields remained fairly stable in 2024, but we may see some compression in 2025 to reflect the interest rate cuts. However, whilst there are a number of factors pointing towards a more active market moving forward, geopolitical instability and ongoing risks remain an issue.”
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