The north’s hotel sector has continued to grow throughout the third quarter of the year despite a number of challenges across the commercial real estate market, fresh research from CBRE NI shows.
The commercial property agent’s third quarter market report has revealed another strong period for Northern Irish hotels, with with revpar (revenue per available room) rising by 8% in the first nine months of the year in Belfast and across Northern Ireland when compared to last year.
Meanwhile separate research conducted by Simon Brien shows that the north’s residential property market has demonstrated resilience in the face of economic challenges, with key indicators showing a positive shift in 2024.
But it again points to house completion levels continuing on a downward trend, with just 5,373 new dwellings completed in the north in 2023 - the lowest since 2005.
The commercial property report by CBRE homes in on a number of highlights in the hotels sector, such as the Armagh City Hotel being brought to the market with a guide price of £9 million, and the Lodge Hotel in Coleraine being acquired by the McKeever Hotel Group.
Meanwhile, Patrick and Edmund Simpson have bought Da Vinci’s Hotel in Derry, the Londonderry Arms Hotel in Carnlough is being purchased by a consortium with plans to create Ireland’s first whiskey hotel, and the Foundry Hotel is opening in Belfast’s Cathedral Quarter.
But political and economic uncertainties have contributed to slower activity across other sectors of the market, notably investment, with just £4.2 million transacted during the third quarter, taking the total for the year to £87.5 million - a 68% decrease compared with the same period in 2023.
The office market was boosted by the inclusion of three serviced office centres, recording 140,096 sq ft of take-up in Q3. However, occupier demand remains selective, with a preference for high-quality, tenant-ready spaces.
CBRE NI managing director Brian Lavery said: “Despite broader economic challenges, we’ve seen substantial investment and development activity, reinforcing the confidence investors and operators have in the region’s hospitality market.
- Historic hotel once owned by Winston Churchill welcomes first new owners in 75 yearsOpens in new window
- Belfast’s newest venue The Foundry opens its doors with 350-capacity bar and restaurantOpens in new window
- McKeever Group confirm acquisition of The Lodge Hotel in ColeraineOpens in new window
- Armagh City Hotel placed on the market with £9m asking priceOpens in new window
- Republic’s largest estate agency Sherry Fitzgerald acquires Simon Brien Residential in significant northern expansionOpens in new window
“The combination of new developments, refurbishments, and key transactions demonstrates the continued growth potential within this sector.”
He added: “While Northern Ireland continues to experience pockets of growth, market sentiment remains tempered by economic headwinds.
“With borrowing costs still high and investors waiting to see the full impact of predicted fiscal policy changes, activity levels have slowed across several sectors.”
While retail remains a challenging sector, recent new openings and upsizing by H&M, Deichmann, TK Maxx and Apple point towards a more rejuvenated Belfast city centre core.
And CBRE says it is aware of other new arrivals planned for 2025 which should provide further retail choice across the city.
The industrial market in Northern Ireland, like much of the UK and Ireland, has been subdued over the last quarter. There has been an increase in stock available over 20,000 sq ft, with demand for larger warehouse units slowing, while demand for units of less than 10,000 sq ft continues to remain strong with a lack of accommodation available in this size bracket.
Meanwhile the research conducted by Simon Brien, which earlier this year became part of the Sherry FitzGerald Group, says that ongoing supply shortages and increasing prices continue to pose challenges for home-buyers and the housing sector.
Its managing director Simon Brien said: “Residential property transactions have picked up pace since the opening months of 2024, following a slowdown last year due to rising borrowing costs. This has been accompanied by notable price growth”.
Preliminary figures for residential sales look set to surpass 2023 levels with transactions totalling an estimated 9,802 in the first half of the year, according to latest data from the Northern Ireland Statistics and Research Agency (Nisra).
The vast majority of transactions (91%) during the first half of the year, consisted of house sales totalling 8,896, with the remaining 906 comprising apartments. More than a fifth (2,019) of all sales were in Belfast.
And price growth continues to trend upwards, with average house prices increasing by 3.6% in the second quarter of 2024 to £185,025, marking a 6.4% rise year-on-year. New dwellings saw even higher growth, with prices up 10.8% year on year.
