Deloitte Real Estate Crane Survey shows resurgence of development in Belfast has been saved
Deloitte Real Estate Crane Survey shows resurgence of development in Belfast
31 January 2017
Construction in Belfast is at its highest level since 2008, with eleven development schemes completed in the city during 2016, according to a new report released today by Deloitte.
The report, the first Belfast Crane Survey produced by Deloitte Real Estate, shows a total of 30 schemes under construction or recently completed in the city. This includes four new educational facilities, seven new student accommodation projects, six office developments and eight new hotels.
Simon Bedford, partner in Deloitte’s Real Estate practice, said: “The report shows that Belfast is on an upward trajectory as a location for investment and development. The number of developments completed and breaking ground in Belfast during 2016 demonstrates real progress since the release of Belfast City Council’s City Centre Investment Framework in 2015.”
The renaissance in Belfast’s development is being led by the education and tourism sectors. Two new hotels were completed in 2016 with a further six hotel projects across the city currently under construction, set to deliver in excess of 1,000 new hotel rooms.
Ulster University’s move to a larger campus in Belfast will be - and has already been - a game changer, with a number of student housing schemes already being built. The report calculates that almost 2,500 student accommodation bed-spaces across seven major projects are currently being built in the city centre area. This is in addition to 413 bed-spaces that completed in 2016. Queens University is also continuing its investment in new teaching facilities and supporting new student residential development in the city centre.
Suzanne Wylie, Chief Executive of Belfast City Council, said : “Deloitte’s report comes at a great time of opportunity for Belfast. The report demonstrates that private sector developers and investors see the opportunities being created by a growth in tourism, new companies locating here, growth in our own business base and more people, including students, wanting to live in the city centre.
“Over the next five years, the City has, through its recently launched Belfast Agenda, set out more ambitious targets to create 15,000 new jobs, double tourism spend and encourage another £1.5bn of investment in more buildings and regeneration projects to meet demands. This surveys demonstrates that we have momentum that will be to the benefit of every part of Northern Ireland, not just Belfast. The model that works for all successful regions across the world is to develop a strong city which helps to grow supply chains throughout the region, create significantly more money in people’s pockets to spend and help to pay for the infrastructure and local developments needed across Northern Ireland.”
Retail and leisure investment is also healthy, with Deloitte noting that the business rate revaluation is leading to more store openings and new brands coming to the city filling space in Ann Street, Castle Lane and Castle Court.
However, office and residential development activity was subdued and represents a near term challenge, although not one unique to Belfast. The report said that 84 residential units were completed in the city centre in 2016, but none are scheduled to come to the market in 2017. Three office developments representing 209,000 sq ft were completed in 2016 and a further three schemes are under construction, and will deliver a much needed 364,527 sq ft of office space into the market over 2017/18.
“Office development has proved difficult to finance in the market, which is unfortunate as the corporate demand for Grade-A office space is on the increase,” added Bedford. “It is also clear that city centre living has yet to really take off in Belfast, but growing student numbers will, we believe, drive this market forward before 2020.”
Bedford concludes: “Our first Belfast Crane Survey confirms that Belfast has much to look forward to. Preparation work is taking place on the construction of a new transport interchange at Great Victoria Street and the development of a cultural hub around York Street/ North Street. Reshaped plans for the Royal Exchange area are also moving forward. These plans will drive the next major moves for Belfast as a city. It is also highly encouraging to note the direct investment being made by Belfast City Council in their city centre – most notably in 2016 through the joint acquisition of the historic former Belfast Telegraph building on York Street.
“Belfast’s popularity as a business and leisure destination continues to rise and this is having a direct impact on the local property and construction sector, which is attracting significant investment to meet demand. Belfast’s development pipeline is in good shape and we therefore expect to see even more cranes on the skyline in 2017 and 2018.”
About the Belfast Crane Survey
This report measures the volume of development taking place across Belfast and its impact. Property types include office, retail, leisure, residential, student accommodation, education and hotels. The areas covered in the report are: The City core, Waterfront, Titanic Quarter, Transport Hub, Inner North and Southern Fringe.
The Crane Survey monitors new schemes or schemes undertaking significant refurbishment of the following:
Office -10,000 sq ft,
Retail – 10,000 sq ft,
Residential – 25 units,
Education, leisure and hotel schemes – significant scheme for inclusion.
The report is carried out by Deloitte’s Northern Ireland Account team team in Belfast who have monitored construction across the city. The Deloitte Real Estate team have been closely involved. Field research is then verified with direct industry links and in-house property experts.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.