Deloitte report shows a resilient Belfast construction sector supported by sustained office demand has been saved
Deloitte report shows a resilient Belfast construction sector supported by sustained office demand
5 February 2019
- 34 schemes under construction, 21 completed last year
- Over 400,000 sq ft of new office space started construction in 2018
- Landmark developments including Belfast Waterside and Tribeca Belfast to begin in 2019
A healthy year for office developments, which saw work begin on over 400,000 sq ft of new Grade A space, helped developer sentiment and construction activity in Belfast city centre to remain positive in 2018, according to a new report released today by Deloitte.
The report, the third annual Belfast Crane Survey produced by Deloitte Real Estate, shows a total of 34 schemes were under construction in the city centre – with 21 schemes completed in 2018 and nine set for completion in 2019. This compares with 30 schemes under construction in the previous year’s survey.
The total this survey includes eleven new hotels, nine office developments, six student accommodation projects, three residential developments, three new educational facilities and two retail schemes.
Approximately 290,000 sq ft of office space was completed in 2018 across five schemes. The office market was buoyed at the end of the year by the announcement that Deloitte’s new Belfast headquarters will be in McAleer & Rushe’s Bedford Square development, due for completion in 2021. Other significant pre-lets are adding to the city’s positive developer sentiment.
Belfast Harbour’s 250,000 sq ft City Quays 3 will be one of the largest Grade A office developments to be built in Northern Ireland when moves to the build phase after receiving planning approval and major schemes including the Belfast Waterside project and Tribeca Belfast should also help sustain activity in the market.
Simon Bedford, Partner in the Deloitte Real Estate practice, said: “The 2019 Belfast Crane Survey captures the changes that have taken place in development trends in the city. This survey we’ve seen the completion of several student accommodation buildings which will widen the higher education offering, increase city centre living and bring new life to neglected parts of the city.
“The city also has a healthy appetite for new office developments and is making good progress against the Belfast Agenda target of 1.5 million sq ft of new space by 2021. There is even potential to increase this target further as the demand exists and new occupier deals in 2019 would instil further confidence in the market, alleviating some of the fears around Brexit,” he added.
“Regular job announcements in IT and professional services by companies like Imperva, FinTru and FieldFisher highlight that there will be a continued need for new Grade A office space.”
The one new build office completion in 2018 was the headquarters of Allstate NI, while there has been a significant amount of investment to refurbish and modernise existing space such as River House, The Weaving Works, Flax House and Artola House.
Following a surge of purpose-built student accommodation schemes in recent years, two further developments started on site in 2018, which will deliver 761 beds at York Street and Little Patrick Street. Construction is ongoing on the 720,000 sq ft Ulster University Campus while a £700 million capital investment project at Queen’s University Belfast is likely to progress in 2019.
The recent boom in new hotel construction has understandably slowed, with new construction starts in 2018 set to deliver a further 224 new hotel rooms to the market. This compares to over 1,000 rooms added to Belfast’s tourism offering in the 10 hotels that completed during last year.
Deloitte also highlighted the need to increase the number of new residential schemes being developed in order to enable wider growth and evolution of Belfast’s city centre in future.
“The Belfast Agenda’s ambitious target of increasing the residential population of Belfast by 70,000 people before 2035 will be a prime indicator of success for the city moving forward. However, there were no new residential starts during 2018. Anecdotally, issues of density and height restrictions have been raised as challenges for developers seeking funding and the limited activity demonstrates that residential schemes remain challenging,” said Simon Bedford.
“While residential needs attention, the key ingredients are there for the future success of Belfast. With the City Deal package secured and notable projects such as the Transport Hub and new visitor attraction on the horizon, there are reasons to be positive in the coming years.”
Note to editors
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 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.
Website – www.deloitte.co.uk/belfastcranesurvey
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.
Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.
Deloitte LLP is a subsidiary of Deloitte NWE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.
The information contained in this press release is correct at the time of going to press.
For more information, please visit www.deloitte.co.uk
Member of Deloitte Touche Tohmatsu Limited