Northern Ireland's commercial property investment market, as analysed by property advisor, Savills Northern Ireland, experienced a strong start to 2023, recording total investment volumes of £157m, an 8% increase compared to the £145m total from H1 2022. The impetus behind this solid performance can be attributed to the rollover of deals from the end of 2022 and an invigorating supply resurgence.

Megan Houston, Senior Surveyor at Savills Northern Ireland, said, "The first half of 2023 has been a vibrant period for Northern Ireland's commercial property investment market. The performance is particularly striking considering the challenges presented by the global economic landscape. The resilience shown and the upward trajectory established underscore the potential and dynamism of our local market."

First quarter performance was particularly strong, with a majority of the transactions taking place during this period. This accounted for £129.6m or 83% of the total H1 investment volume. Among the notable transactions in Q1 were the £46.5m sale of Rushmere Shopping Centre and Retail Park, Craigavon, to Killahoey Limited and Target Healthcare REIT’s £22.0m sale of a portfolio of four care homes.

The retail sector remained robust, becoming the mainstay of Northern Ireland's commercial property market with an investment volume of £67.3m. This accounted for 43% of the market share. Houston noted, "Retail remains the lifeblood of our market, and we've seen some significant transactions this year, such as the sale of Marks and Spencer, Donegall Place and the restaurant parade at Boucher Square."

Contrastingly, the industrial sector was less vibrant due to insufficient stock, even though demand remained high. Yet, there were encouraging signs with a significant off-market transaction of an industrial investment in County Down marking the third-largest industrial deal on record.

Houston also highlighted a significant shift in the buyer demographic. "Private local investors have emerged as the most active buyers in H1 2023. The landscape has dramatically changed post-Brexit, with UK institutional investment stalling and property companies, high net worth individuals, and private equity investors stepping in to fill the void."

These new players are identifying better yields on Northern Ireland real estate when compared to GB or ROI markets. Coupled with soaring inflation squeezing real rates of return, the region is increasingly viewed as a value play. Investors are taking a contrary view on Brexit, perceiving Northern Ireland as a unique gateway between the EU and the UK.

Lastly, Houston emphasised the growing importance of Environmental, Social, and Governance (ESG) considerations in property investment. "Investors are placing increasing importance on properties that align with their environmental goals. Buildings that do not meet these sustainability criteria risk being increasingly marginalised. Investing in green buildings is now seen as a strategic move to mitigate the future costs of retrofitting older stock or having to sell assets at discounted prices."