Belfast Crane Survey 2022

Time to build bolder
Belfast Crane Survey 2022

The Report

Why?
A report that measures the volume of development taking place across central Belfast and its impact. Property types include residential, office, leisure, hotels, retail, student accommodation, education and research facilities, and healthcare.

Where?
The City Core, Waterfront, Titanic Quarter, Transport Hub, Inner North, Linen Quarter and Southern Fringe.

What?
Developers building new schemes or undertaking significant refurbishments exceeding the following sizes: office – 10,000 sq ft; retail and leisure – 10,000 sq ft; residential property – 25 units; education, healthcare, and research – 10,000 sq ft; hotel – 35 rooms.

When?
Data for the Crane Survey recorded development activity between 11 January 2021 and 18 December 2021.

How?
Research for this report was undertaken by Deloitte’s Northern Ireland team, based in Belfast. The Deloitte Real Estate team have also been closely involved in the development of Belfast over recent years. In addition to our in-house knowledge and field research we have used a variety of sources to collate and validate our research. These sources include the Northern Ireland Planning Portal, local media and trade publications, and construction and development industry contacts.

The findings

The COVID-19 pandemic and its associated restrictions have had a profound impact on UK cities, including Belfast. Nevertheless, the city has remained resilient in the face of the restrictions and the uncertainty. Insulating factors which ensured that development continued in Belfast through 2021 have included a strong labour market, the delivery of high-quality office space and a growing student population.

There was one fewer new start in 2021 compared with 2020. This slowdown was expected given the disruption caused by COVID-19. Even so, construction completed on nine schemes in 2021, and a total of 23 schemes were either under construction or completed in the year.

January 2021 saw the end of the EU Exit transition period. However under the Northern Ireland Protocol, Northern Ireland continues to have access to the Great Britain (GB) and the EU markets, which has provided Belfast with a unique selling point for inward investors to consider.

Following the trend in recent years, Grade A office space remained the biggest area of development in 2021 (by number of developments). This indicates that the city remains competitive in attracting corporate investment and employers.

Growing the city centre residential population continues to be a key ambition for Belfast. However, while several small schemes underway offer some hope, there were no new starts above our scale threshold (of 25 units) and only 42 homes in total completed. While favourable factors exist in Belfast – high-quality jobs, investment in public transport, affordable living conditions and a growing student population – the rate of growth has been slow and accelerating it remains a priority.

Given the vast amount of change in recent years and reflections on the role of the city, there is now a greater desire to create a people-focused, sustainable, multi-purpose city centre, with a balanced mix of office, retail, leisure, educational and residential. Looking forward, there are large mixed-use schemes in the pipeline, including Tribeca and Belfast Waterside.

A major milestone during 2021 was the signing of the Belfast Region City Deal (BRCD) in December. This concord between central and local government will provide £850 million of funding to the BRCD partners (Belfast City Council, five partner councils, two universities and four of the region’s further education colleges) with the objective of creating up to 20,000 new jobs and regenerating towns and cities across the region.

While 2021 was undoubtedly a relatively quiet year for development in Belfast, the city continues to show resilience in the face of uncertainty. Positively, strategic plans such as the draft Bolder Vision for Belfast document are increasingly informed by the current context, providing long-term direction with the potential to accelerate regeneration and investment in the city.

Residential development in the city centre continues to be slow, with no new starts recorded in 2021. Despite this, positive conditions include the continued attraction of high-quality jobs, a growing student population and investment in the city’s transport infrastructure.

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There was only one residential development in the city centre in 2021. The Brickworks concluded construction in Q4 2021:

  • The Brickworks: a £5 million investment located on the Ormeau Roads has created 42 homes for social housing, split across three blocks.

The development is being delivered by Choice Housing, and is part of an ongoing programme of social housing across the city.

Separate from the Choice Housing developments, construction commenced on Wilton House, a 23-unit apartment development on College Square North in 2021, but this is under our 25-unit threshold for recording developments in our Survey. Work is also ongoing on part of the historic Castle Buildings on Castle Place, converting space above shops into apartments.

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Since the Belfast Crane Surveys began, only 306 residential properties have been completed in the city centre in developments that meet our minimum threshold of schemes over 25 homes. Whilst lower density housing programmes take place outside of the Crane Survey area, demand for new city centre residential development remains insufficient to help larger projects get off the ground. However 2022 might see a change in this trend.

Looking forward

A recurring theme in recent years has been residential schemes failing to progress to the construction phase after gaining planning approval, and there has been a shortage of supply in the residential market. There was substantial increase in house prices in the city centre in 2021, and the year-on-year rise in rental prices in Belfast was 5.6%.

Historically Belfast city centre has had a smaller residential population than other cities in the UK, and growth during recent decades has been limited. Nevertheless, the ambition to increase residential accommodation continues, and Belfast City Council aims to deliver 1,600 new city centre homes by 2025. The document ‘A Bolder Vision for Belfast’, which has been open to public consultation, sees the city centre as an inclusive place to live as a key theme for change, and promotes wellbeing, the use of public transport and creating a lively community. It flags opportunities such as converting multi-storey retail buildings into housing, the new resident student population, and the availability of city centre land and underused heritage buildings.

On this basis, despite a lack of new starts, work continues to progress future residential investment in the city centre. The Loft Lines, a 778-unit apartment block to be located in the Titanic Quarter that focuses on sustainable living, is progressing through the planning process after receiving construction support from Belfast City Council. The development will prioritise bikes and pedestrians over cars and will include a park area, to be called South Yard Square. Progression of this It is the single largest residential scheme since the Belfast Crane Surveys began in 2016.

In addition, residential development is set to form a part of major regeneration projects, including Castlebrooke’s £500m Tribeca scheme (about 340 units as part of a 12-acre site) and Osborne+Co’s partnership with Moda Living to deliver the £150m Belfast Waterside scheme (about 500 units as part of a 15-acre mixed-use development). If the challenge of delivering large scale residential development in Belfast can be met, it will kick start significant amounts of regeneration in other sectors.

The construction of more student accommodation, supporting Ulster University’s ambition for growth, is likely to bring a younger demographic to the city and increase demand for city centre living.

That said, wider residential development has remained sluggish at a time when it has become clear that resilient and vibrant city centres need a substantial resident population.

Encouragingly, Belfast Harbour has announced a City Quays Gardens development - a new sustainable green space for the city, due to commence in 2022; the ‘Streets Ahead’ public realm initiatives are being extended; and new parklets are replacing street parking. These will all likely support the creation of a more attractive city centre as a place to live.

Office development continues to be the sector with the most growth in the city centre, despite continued uncertainty around the future of work and restrictions relating to COVID-19 during 2021. Nine Grade A office developments were under construction or completed in 2021, amounting to over one million sq ft of space.

There were three office new starts in 2021, two less than in the previous year. The 2021 new starts total 150,000 sq ft of Grade A office space:

  • The Well: a 36,000 sq ft Grade A office development located on Wellington Street, which is due to complete in early 2022.
  • The Printworks: a 56,000 sq ft regeneration project led by Angus Properties, located on Queen Street, which is due to complete late 2022.
  • Custom House: investment of £7.5 million for renovation and internal fit-out of the B-listed Custom House building to provide 58,000 sq ft of refurbished space. The property was purchased in 2020 by Straidorn Properties, which is also providing the investment finance.
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These new starts are relatively small compared to the developments that commenced in 2020 (Olympic House 148,000 sq ft, and The Paper Exchange 155,000 sq ft). This slowdown in office developments is in part linked to a deferral of decisions relating to the physical office footprint and the future of work. For example the One Bankmore Square site, which is owned by technology company Kainos, is set to become temporarily a street food pop-up as the company reconsiders its future office needs.

The slowdown is also linked to the large amount of new office space that completed in 2021 and is set to complete during 2022. A significant volume of space is due to enter the market and a readjustment period in the market is likely while developers appraise the residual demand.

Data suggests that the price for either Grade A new build or refurbished space is around £20 per sq ft, with new build space slightly higher. This means that space is affordable for occupiers but is not as appealing for developers seeking a return on their investment.

Three office developments concluded construction in 2021:

  • 35DP: approximately 28,000 sq ft of Grade A office space developed in and above what was previously retail space
  • The Vantage: a 67,500 sq ft £25 million investment located on Great Victoria Street
  • City Quays 3: the biggest single office development in 2021, creating a total of 250,000 sq ft beside the existing City Quays 1 and 2. The £50 million office block can accommodate up to 2,500 employees.

Work in progress

Three schemes, amounting to 558,000 sq ft of Grade A office space, continued construction through 2021:

  • Bedford Square: a part new-build, part refurbishment project comprising 210,000 sq ft office building on Bedford Street. The scheme includes the redevelopment of the old Ewart's Warehouse into the foyer for an adjoining a 17-storey office block, with Deloitte as the anchor tenant taking 90,000 sq ft
  • Olympic House: a 148,000 sq ft office development located in the Titanic Quarter
  • The Paper Exchange: comprising 11 storeys and 155,000 sq ft of new office floor space.

All these schemes are due to complete construction in 2022 and there are no completions scheduled for 2023. This means that supply is limited beyond the end of this calendar year unless new schemes can come forward to boost supply into 2023 and beyond. There are a number of large scale regeneration projects that can come forward to generate some momentum, which will be boosted by the city’s strong technology and finance credentials. This may also help to catalyse development in other sectors, such as residential, and re-connect new and existing parts of the city centre to create a better sense of place.

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Despite a healthy portfolio of office schemes under construction or completed in 2021, the vast majority of space is still to let. Given the impact of COVID-19, combined with the large quantity of new office space coming to market, this is not unexpected. As a result of government-imposed remote working during most of 2021, it is unlikely in the short term that vacant office space will be taken up while would-be occupiers are evaluating their post-pandemic accommodation needs.

January 2021 saw the end of the EU Exit transition period. However, under the Northern Ireland Protocol, NI continues to have access to the Great Britain and the EU markets. This has provided Belfast with a unique attractiveness to inward investors. Job creation, especially in technology and professional services, has continued.

High profile job announcements include 700 jobs at PwC, 100 new jobs at Igale, and the creation of 180 jobs by ASOS at a new Tech Hub. Fintech is emerging as a key employment sector for the city through support for the cross-border Fintech Corridor initiative, and Belfast currently sits in 11th place in the European Tech Cities of the Future. With Ulster University as a new corporate partner for the Fintech Corridor, this strategic direction and level of profile should help the city attract the best companies and talent in the sector in years to come.

Looking forward

As hybrid working becomes the norm, firms are looking to save money and be more environment-friendly by using less office space. The Deloitte London Office Crane Survey Winter 2021 highlighted the need for improved quality of office space, and companies are reflecting on the overall ‘office experience’ for their employees.

There is a new focus on environment, social and governance (ESG) issues and office occupiers are demanding more. In future the features of internal office space will be different, moving towards designs with a much higher proportion of space dedicated to collaboration and group working.

A further constraint on the industry is construction cost inflation. The Ulster Bank Purchasing Managers Index report noted that price rises were affecting the ability of construction firms to secure new projects. However, several mixed-use schemes continue in the pipeline including:

  • The Sixth: a development from Belfast City Council and McAleer & Rushe proposed to create 230,000 sq ft of workspace adjacent to the new Ulster University campus.
  • Smithfield: a major £60m regeneration of the Smithfield Market area comprising 260,000 sq ft of new office space.
  • Waterside: 790,000 sq ft of Grade A space across five large scale buildings with flexible floor plates.
  • Tribeca, Sixtythree: a proposed development with 33,000 sq ft of new Grade A office space.
  • Weavers Cross: part of the wider regeneration project associated with the Transport Hub. Weavers Cross commenced enabling works in 2021 and will include over 1m sq ft of Grade A office space.

Overall, there is a shift occurring in the ways of working, the impact of which is not yet fully understood, and has left many companies assessing their office requirements. Deloitte’s future of work report comments that this assessment of the physical office needs creates the opportunity to rethink the workplace – integrating the best of physical space with digital practice while embracing constant change.

Continuing demand for student accommodation

Over the past six years, Belfast has seen the delivery of over 4,000 new bed spaces as purpose-built student accommodation (PBSA). Over 700 new rooms were delivered to market in 2021 alone, in one major development which completed in September:

  • LIV Student Belfast at 81-101 York Street contains 717 en-suite rooms and is one of the largest Purpose-Built Student Accommodation (PBSA) blocks built in the city to date. The 14-storey tower is located a short distance from the Ulster University Belfast campus.

Work also continued on two major student accommodation schemes:

  • Aster House: a 253-unit development by CA Ventures and Lacuna Developments in the Queen’s area of the city, due to complete in Q2 2022
  • 18 - 26 Library Street: a 393-unit development by Lacuna Developments located in the vicinity of the Ulster University campus, due to complete in Q2 2023. Work paused during the lockdown period in 2020-21 but has now recommenced.

One major new start commenced in late 2021:

  • Nelson Street: an 11-storey PBSA, comprising 774 bed spaces located near Ulster University. This scheme is the single largest development in the history of the Belfast Crane Survey.
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The volume of units under development and completed has increased steadily since 2019, following a peak in 2018. The stock in the vicinity of the Ulster University campus is transforming that area of the city even in advance of the campus completing construction and opening fully.

There is a notable parallel to be drawn between hotel development in Belfast and the development of student accommodation. Both sectors had a significant historical deficit for a city of Belfast’s size and stature, for a variety of reasons. In both cases, there has been a substantial re-balancing in recent years, with a large volumes of hotel rooms and student accommodation rooms completed and under development. However, while hotel development has largely paused following the completion of a surge of developments in 2018 and disruption from COVID-19, student accommodation developments have continued in a steady manner.

The peak or the beginning?

COVID-19 has affected both student accommodation providers and students themselves. This impact has been two-fold, with opposite effects:

  • During the most heavily-affected lockdown period March 2020–April 2021 many students moved home to avoid spending long periods isolated in accommodation blocks. Refunds and rent holidays were offered by providers including Queen’s University. In Queen’s-owned accommodation alone, over 1,200 students paused their accommodation contracts and over 1,000 withdrew altogether between October 2020 and April 2021. The estimated total cost to the university was in the region of £5 million.
  • Following the easing of the most stringent lockdown restrictions there was a surge in demand for student accommodation for the term beginning September 2021. Queen’s in particular received an estimated 12 per cent increase in the number of first year applications for university accommodation. This led to actions to mitigate over-demand such as offering £1,500 for students to forfeit places in university halls, the use of temporary accommodation in hotels, and only those students with home addresses over 40 miles from Belfast having the guarantee of an accommodation space.

Despite reported pressure on spaces for student accommodation, UCAS data suggests that the overall number of applicants from Northern Ireland entering higher education did not change significantly between 2020-21 (14,910) and 2021-22 (14,880). Both years represent an increase on 2019-20 (13,850).

Resources including the National Student Survey and the Student COVID-19 Insights Survey (SCIS) make it abundantly clear that the period most affected by COVID-19 was a distressing and unsettling time for many students across the UK. A substantial number of students reported a negative impact on their academic performance because of isolation and fully remote learning, with many also reporting and seeking support for mental health issues.

However there is cause for optimism for students in Belfast after a difficult period. The return of in-classroom teaching, the completion of a world-class new Ulster University campus, and the quality and increase in stock of PBSA in the city ensure that Belfast’s student offering is on a firm footing. Developers too have shown optimism about the outlook for the city. The following schemes have progressed in 2021 and are likely to start during 2022:

  • A 724-room block on Donegall Street being developed by LDS Devco and Banbridge-based Lotus Property gained planning permission in August 2021. The £55 million project is located close to the Ulster University Belfast campus and aims to increase further the considerable student presence in that area of the city.
  • A 156-room development on Bradbury Place progressed: the existing structures were demolished and the site cleared. The £20 million project is funded by Dublin-based Elkstone Partners.
  • Revised plans have been submitted by McAleer & Rushe for the development of a £20 million 15-storey scheme on Bruce Street. The scheme was previously approved, and the existing structures were cleared from the site during 2019-20.

A major milestone approaches

The primary Ulster University Belfast campus (Phase 2) is making progress towards its conclusion, with the first classes in the new structure beginning in September 2021. The £360 million project has been further delayed in 2021 due to supply chain problems. However, with much of the structure complete, it is anticipated that the project will be fully functional by the beginning of the 2022-23 academic year.

  • Ulster University Belfast Campus: on completion the 960,000 sq ft facility will have the capacity to host 15,000 students. There is much cause for celebration that this major project in the city is nearing completion.

The regenerative impact of the project in the north of the city is already evident, given that about 3,000 new and existing student accommodation rooms are now located in close proximity. With easy passage into the Cathedral Quarter, the area of the city surrounding the new campus has seen other new investment, not least in retail and hospitality.

North and south

Investment in education and student accommodation is ongoing in the south of the city, where over one million sq ft of education space is under construction and due for completion in 2022. Queen’s University has continued its Capital Development Programme, and its flagship Student Centre is due to complete in time for the 2022-23 academic year.

  • Queen's Student Centre: A 120,000 sq ft Student Centre, which will create a new integrated facility to accommodate support, advice, and representational, developmental, and commercial services provided by the University and the Students’ Union. This scheme is due to complete in Q3 2022.

Also due to complete is the expansion of facilities at Riddell Hall, which will add 70,000 sq ft of space. Progress also continues on the privately-funded PBSA project in the southern fringe of the city centre.

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Looking forward

The completion of the Ulster University Belfast Campus is a game changer for the city centre. Combined with the significant capital investment by Queen’s University, and a strong PBSA pipeline, the future looks bright for higher education in Belfast. Concerns about whether students will want to return to the city for in-person learning have largely dissipated, in view of the large demand for accommodation in 2021.

With an established historic campus and a brand-new campus due to open, together with a large volume of modern PBSA, the Belfast student offering is as strong as it has ever been. There is also potential for the city to build a skilled workforce to attract further investment, by providing an attractive residential offering in the city centre for students as they graduate and progress into working life.

A long inward breath

No hotel rooms were completed in Belfast in 2021, for the third year in a row. While on the surface this seems to suggest either a lack of demand or oversupply, it is actually the result of the substantial volume of hotel rooms completed between 2016 and 2018.

COVID-19 halted international tourism for much of 2020 and substantially limited the ease of travel in 2021. The reduction in new hotel stock coming to market since 2019 can be seen as a consequence of market adjustment and global circumstances, rather than an indication that Belfast’s star is dimming as an attraction.

This view is supported by the commencement of a new development in 2021, the first start in the sector since over 1,200 hotel rooms were completed in 2018:

  • Queen Street Aparthotel: a 175-room aparthotel being developed by Oakland Holdings and due for completion in 2023.

Equally important, there were no major permanent closures of hotels or visitor accommodation in 2021. The sustained quantity of existing stock is an indication that investors and operators retain confidence in the city.

One small development of note also completed in 2021. ‘The Regency’, a refurbishment of Regency House on Upper Crescent, was completed in Q4, creating six luxury-style self-catering apartments. £2.5 million was invested in these formerly derelict Georgian town houses.

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A sobering look back

Despite causes for optimism looking forward, the devastation caused to the hospitality industry in Belfast since March 2020 was extensive. An estimated 2,100 jobs were lost in the hotel sector in 2020, with corporate earnings decreasing overall by 90 per cent compared to 2019. The Northern Ireland Tourism Alliance estimated that, as of March 2021, total visitor spending had fallen by £800 million since the start of the pandemic in early 2020.

Compared to the turbulence in 2020, summer 2021 should be seen as a success in the circumstances. Following a 16-month lull, an estimated 76,000 cruise ship passengers visited between March and August 2021. Hotel room occupancy rates also recovered, to 66 per cent for nights on which accommodation was open to guests between January and September 2021. This contrasts with rate of just 32 per cent for the equivalent period January – September 2020.

The recovery has brought its own challenges. Various factors have had an impact on the industry since COVID-19 regulations were relaxed in spring 2021:

  • With many staff made redundant or placed on furlough at the height of the pandemic, there has been a surge in job vacancies, which the available supply of labour has been unable to fill. There was an estimated eleven-fold increase in vacancies for hospitality staff in summer 2021.
  • Supply chain pressures and price rises have put pressure on the bottom line for many operators. 58 per cent of businesses in Northern Ireland reported cost increases of six per cent of more in Q3 2021 alone. Across the UK, over 70 per cent of businesses reported increases in their costs for food and drink.
  • Exacerbating the scale of job vacancies is the departure of EU nationals following the UK’s departure from the European Union, accelerated by COVID-19.
  • Despite the indefinite extension by the UK Government of the ‘grace period’ for customs checks on goods entering Northern Ireland from the UK, there remains uncertainty over the long-term arrangements that make up the Northern Ireland Protocol.

What next?

It remains to be seen what the pace of recovery in the hospitality and tourism sectors will be. There are reasons to be optimistic that the prospects for 2022 are brighter than in 2021. However, international travel and hospitality in general remains exposed to the risk of any resurgence of the pandemic despite the vaccine rollout.

Based on trends during 2020 and 2021, domestic and nearby markets would appear to be most likely to recover first, followed by more distant markets. Should visitor numbers recover, and hotels enjoy a full year of remaining open, there will likely be a period of re-acclimatisation while the market determines to what extent existing stock in the city is capable of satisfying demand.

With respect to new schemes emerging or progressing in 2021, the only project in the pipeline is a six-storey 276-bedroom hotel to be constructed on Hamilton Dock in the Titanic Quarter, which gained planning permission in January 2020.

Compounding uncertainty is the ongoing scarcity of business tourism relative to pre-pandemic benchmarks. This is a global trend observed across developed economies. Combined with emphasis on reducing carbon emissions and the likely permanence of increased working from home, even the most optimistic outlook does not anticipate a return to the levels of business travel expenditure seen in 2019.

Taking action

While many investors may be taking a ‘wait and see’ approach to new developments, existing operators and government cannot afford to delay their response, given the importance of the industry to the Belfast wider Northern Ireland economy.

Proactive initiatives to date include the creation of the Ambassador Circle by Tourism NI to foster relationships which may attract business tourism, and the publication of a Tourism Recovery Action Plan by the Department for the Economy in May. Essential measures required in 2022 include restoring confidence among the workforce that tourism-related careers will be secure, upskilling employees, and maximising the potential for domestic and cross-border tourism – turning limitations on international travel into an opportunity given that many destinations may continue to be restricted.

Notably, Belfast City Council has purchased 2 Royal Avenue, a beautiful historic building recently vacated by a supermarket chain and has rapidly re-purposed it as an event space for music, arts, exhibitions and markets. There has been a positive response to this move, which may be indicative of the opportunities that need to be considered for creating a reimagined city centre.

  • 2 Royal Avenue: redevelopment of 16,100 sq ft of former retail space to create new city centre events space, operated by Belfast City Council. The original building was designed by renowned local architect W.J. Barre and constructed during the Victorian era.

Belfast was designated an UNESCO City of Music during 2021. This is linked to further progress made via the Belfast Region City Deal on the development of a large-scale attraction which will highlight the city’s cultural prominence. The £100 million Belfast Stories visitor experience was formally announced in December 2021 – a concept designed as a focal point for the screen industry, including a state-of-the-art cultural cinema, and to provide public realm and event space. This attraction is due to open in 2028.

Although there are pandemic-related challenges for tourism in the short term, Belfast as a city continues to invest in tourism as a driver of inclusive economic growth and key to regeneration of the city centre.

Retail reorientated

2021 was another disrupted and challenging year for city centre retail in Belfast. Many businesses were unable to open until May 2021 due to restrictions on ‘non-essential’ retail from the beginning of the year. This forced many consumers to make their purchases online and retailers to develop their online selling.

Once re-opening became possible in spring 2021, there were signs that shoppers were returning to in-store retail, with footfall in all subsequent months up on the corresponding period in 2020, though down 24 per cent compared to 2019. Autumn footfall was boosted significantly by the ‘Spend Local’ scheme, which saw 1.3 million £100 vouchers issued and an estimated £100 million spent in local retailers.

There were no new retail starts in 2021; however one scheme continued work though the year.

  • The Bank Buildings: the rebuilding of the iconic structure which was destroyed by fire in 2018 has entered the construction phase and will be re-occupied by Primark on completion.

One retail scheme was completed in 2021:

  • 23-29 Castle Place (Calvert House): a redevelopment of the former DV8 premises which were vacated following the Bank Buildings fire, creating 34,000 sq ft of retail space to be occupied by JD Sports.
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Several new schemes have emerged during 2021 and are in the pre-construction phase. It is anticipated that construction on these schemes will begin in 2022.

Schemes include:

  • ‘Belfast Keep’: a proposed mixed-use retail and leisure space on the site of the former BHS store on Castle Lane (vacant since spring 2016) by Belfast-based investors Alterity
  • 16-24 Cornmarket: a proposed four-storey mixed-use office and retail scheme, with the bottom two floors for retail spaces and the upper two storeys for office use.

Both these schemes are located well within the existing retail core of the city, in the area approximately bounded by Victoria Square and Castlecourt. This is indicative of a broad theme in city centre retail, which is to focus on retention and reclamation of consumers, rather than expansion of space. While greatly buoyed by the ‘Spend Local’ scheme, there are mixed messages about the extent of the return of consumers to in-store premises.

The Deloitte Consumer Tracker for Q3 2021 suggests that with the reopening of the economy consumers have been spending more, saving less and borrowing more. However, data also points to consumer concerns about their personal finances as the cost of living increases and the government’s pandemic support schemes are wound down.

In a sign that savings accumulated during the lockdown are being used up because of rising living costs, more than one in three consumers (36%) say they have seen their overall personal expenditure go up in Q3 2021. While the increase in consumer spending is a cause for optimism, it is notable that footfall in the city centre is still lagging typical levels.

There is also optimism in 2022, with the anticipated re-opening of the Bank Buildings. Combined with the strength of the city’s independent retail offering and the gradual return of consumers, Belfast's retail experience will continue to be a key ingredient in the city core.

A major leisure scheme breaks ground

One major leisure scheme commenced in 2021. Following a year of site preparation works, the development of the Belfast Transport Hub began transition to the construction phase. The development will greatly expand the existing bus and railway station on Great Victoria Street. In addition to transforming the city’s transport offering, the Hub will provide a large amount of new public space – including Saltwater Square, a space for art, entertainment and leisure.

An estimated £208 million is being invested in the Transport Hub to create a fully integrated train and bus terminal to replace the ageing Great Victoria Street facility. The investment is anticipated to have a significant regenerative effect on the surrounding area, with the associated Weaver’s Cross and Saltwater Square creating new mixed-use and recreational spaces on previously unused land.

  • Belfast Transport Hub: creation of about 1 million sq ft bus/train station with associated leisure and retail space.

Work concluded on the £17 million refurbishment of The Odyssey Pavilion in Q4 2021.

  • Odyssey Pavilion: renovation commenced in 2019 to reconfigure almost 250,000 sq ft of space with new restaurant and leisure spaces.

Work also concluded on the £12.2 restoration of the Grand Opera House, which re-opened in June 2021. The investment in this historic city centre venue was financed by stakeholders that include the Lottery Heritage Fund, the Department for Communities, and charitable foundations.

The evolving role of leisure in the city centre

In recent years, there has been a growing focus on sustainability and green spaces in the city. These themes were central to the draft ‘Bolder Vision for Belfast’ which articulates the need for a “green, people focused, connected city centre”. The Bolder Vision document contains the ambition to reduce reliance of private car transport; prioritise walking, cycling, and public transport; and create green spaces and an inclusive public realm.

In January 2021, Belfast City Council committing to developing a ‘30 by 30’ biodiversity campaign for the city – reflecting an initiative originated at the UN Biodiversity Summit in September 2020 to return 30% of land and sea to nature by 2030. Details about the delivery of this ambitious and forward-looking vision for the city are yet to be published; however it will present an opportunity for Belfast to forge an exciting path ahead, with leisure and wellbeing at the centre of future city planning decisions.

It is about two years since the first pandemic-induced lockdown, and it is necessary to escape from the mind-set that the disruption associated with COVID-19 is temporary and will cease as restrictions ease. There are now new norms that are here to stay.

The flowing key themes have been identified in our findings for 2021:

  • There were fewer new starts in 2021 than in any previous year we have carried out the Belfast Crane Survey (since 2016). Various factors have led to this situation – some of which are non-specific to Belfast (e.g., the impact of COVID-19) and some of which are unique to the city (e.g., NI Protocol uncertainty; market adjustment following significant volumes of new office, student accommodation and hotel stock entering the market in recent years).
  • We are at the beginning of a longer-term change in the character of the city centre, as sustainability and liveability come increasingly to the forefront of future planning. The publication of the draft ‘Bolder Vision for Belfast’ highlights such priorities.
  • The volume of office space completed or under construction continues to be high; however this is driven by pre-pandemic momentum. While its future role is still evolving, the office will continue as a key element in the future of work, albeit in a hybrid model alongside working from home. Positively, the jobs market is buoyant for technology and professional services firms (both domestic and international) which are heavily associated with demand for city centre office space. .
  • Hospitality is beginning to emerge from a painful and lengthy period of disruption but the lingering negative impacts on staff and operators may take time to heal. Re-skilling, re-energising, and creating a sense of security within the industry will be vital rebuilding Belfast’s previously bustling hospitality economy.
  • Tourism is beginning to recover as a going concern though it is likely that the focus in the short-to-medium term will be on visitors from GB and Ireland and on local tourism. International travel is beginning to be restored to full functionality but is still vulnerable to restrictions and uncertainty as the pandemic continues. The Belfast City Region Deal will continue to invest in this industry sector, highlighting its importance in the longer term. Announcement of the Belfast Stories development signifies a major commitment to enhancing the city’s appeal.
  • Retail is adjusting to systemic change as consumer habits become increasingly digitally-orientated. It will be important to offer consumers a differentiated in-store experience to attract them to the high street – with independent and local businesses potentially at the forefront.
  • Major investment in public transport has continued with the commencement of construction on the Transport Hub. In addition to replacing the ageing Great Victoria Street terminal, the project will act as a ‘gateway’ to the city for visitors. Work has also continued in preparation for the launch of Phase 2 of the Belfast Rapid Transit Project (the ‘Glider’).

Undoubtedly, 2021 has been another challenging year. Continuing restrictions and the impact of COVID-19 have added to challenges faced by the city pre-pandemic. Given the challenges that are likely to continue in the short run, and the attitudes of potential investors, businesses, residents, and students as they come through the pandemic, the ’Bolder Vision’ draft for the city centre has arrived at an opportune time. How it shapes future investment, and whether it delivers a stronger outcome, will be watched keenly.

City Core
Waterfront
Titanic Quarter
Transport Hub
Inner North
Southern Fringe
Linen Quarter

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Contacts

Jackie Henry

Partner, Consulting

Simon Bedford

Partner, Real Assets Advisory - Development