Opportunities to boost the Northern Ireland economy and its real estate sector
CBRE urge focussing on the positives.
Belfast, March 13th 2012 – Speaking earlier today at a property market briefing to the Northern Ireland Assembly & Business Trust, property consultants CBRE said that there are a number of areas that need focus to ensure that Northern Ireland is in pole position to grow the economy and in turn boost its real estate sector over the coming years.
According to Marie Hunt, Executive Director and Head of Research at CBRE, conditions in the commercial property market in Northern Ireland remain challenging. She said that there is no denying that the real estate sector in Northern Ireland has suffered as a result of the economic situation. However, she pointed out that there is a need to focus on the positives and that it is encouraging that the occupier sectors (office, retail and industrial) of the market in Northern Ireland are holding up quite well, fuelled to some extent by new private sector investment. Occupancy costs in Northern Ireland are at least 50% lower than those prevailing in the Republic and wage costs and house prices are considerably lower but according to CBRE, the many competitive advantages that prevail in the Province will only be fully capitalised on if there is a reduction in the rate of corporation tax in Northern Ireland. The property consultants said that only 13% of office take-up in Belfast last year emanated from US companies compared to 38% of the Dublin market.
According to CBRE, ensuring that Northern Ireland obtains autonomy to set its own rate of corporate tax and the promotion of the designation of enterprise zones have the potential to significantly boost much needed foreign direct investment, reduce the traditional reliance on the public sector and create jobs in the region. Indeed, last week Grow NI said that a reduction in the corporate tax rate in Northern Ireland had the potential to create as many as 50,000 new jobs.
In reference to the fact that room rates in the hotel sector in Northern Ireland remain under significant pressure, CBRE urged the need to capitalise on the tourism opportunities that emerge as a result of all of the events that are due to take place in Northern Ireland in 2012, not least the Titanic Centenary celebrations, the Round the World Yacht race and the hosting of the Irish Open.
The property consultants alluded to the cost of rates for small businesses and stressed the need for greater investment in town centre regeneration and the establishment of Business Improvement Districts (BIDS), which they say will ensure that local businesses are enabled to thrive, not just survive.
CBRE said that more intensive asset management of public sector properties is required, particularly if there is a desire to sell parts of this portfolio, considering the appetite from investors for long-term income on full repairing and insuring leases. They say that there are a number of UK funds and institutions looking at purchasing investment properties in Northern Ireland but that they are predominantly focussed on prime properties.
According to Brian Lavery, Managing Director at CBRE in Northern Ireland, “Northern Ireland has a lot of positive attributes. A wide range of small and medium sized companies from the Province are exporting goods and services all over the world. A number of new FDI announcements have been made in the last 12 months encouraged by a young highly-educated workforce, excellent broadband and transport infrastructure and the regions’ many competitive advantages. Rather than focussing on the negatives, which is all too easy in the current climate, we need to focus more intently on promoting the peace and stability message and focussing on the specific areas where we can boost Northern Ireland’s profile and prospects. This will reap benefits for the local economy and in turn boost the regions’ commercial property market”.
CONTACT: Marie Hunt – 01 6185543 /087 2727115 or firstname.lastname@example.org
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.