The survey found that despite a healthy portfolio of office schemes under construction or complete in 2021, tenancy arrangements have yet to be confirmed for a large proportion of the new space.
The construction of high-quality office space continued to drive development activity in Belfast in 2021, according to Deloitte’s latest Regional Crane Survey.
The annual survey monitors construction activity in Belfast across a range of sectors including offices, residential, hotels, retail, education and student housing, and is seen as a barometer of developer sentiment and future supply.
Now in its sixth year, it showed that in total 23 major schemes were under construction or completed in Belfast in 2021, slightly fewer than the 24 schemes in 2020 and the 26 built in 2019.
Seven significant projects broke ground in 2021, the same level as 2020 and the joint lowest number since the report began. However, the pipeline for 2022 is healthy for most sectors, with over 650,000 sq ft of office space to be completed across five schemes.
Nine major developments were completed in the city during the year, including three Grade A office buildings, a city centre event space on Royal Avenue and the refurbishment of the Odyssey Pavilion into a new leisure destination.
Nine Grade A office developments were under construction or completed in 2021, amounting to over 1,000,000 sq ft of space. This includes Bedford Square, a part new-build, part refurbishment project comprising 210,000 sq ft of office space on Bedford Street, which will be Deloitte’s new headquarters; and The Paper Exchange, an 11-storey building with 155,000 sq ft of new office floorspace.
The survey found that despite a healthy portfolio of office schemes under construction or complete in 2021, tenancy arrangements have yet to be confirmed for a large proportion of the new space, with recent ‘working from home’ guidelines seeing companies reassess office needs in the short-term.
Residential development in the city centre remained slow, with no new starts in 2021 and only 42 homes completed. However, some smaller projects, below the threshold for the report, are currently underway, providing some expectation of growth in the sector.
The survey shows an emerging trend of rising refurbishments compared to new builds in the city centre, with just over a third (37%) of construction activity consisting of refurbishments.
Simon Bedford, partner in real estate at Deloitte, said: “Despite a number of challenges, the Belfast construction market remained resilient as office space continued to drive the development of the city centre. It’s encouraging to see a healthy pipeline, with 2022 set to be a record-breaking year for office development in the centre. With a move towards collaborative office spaces and a new focus on Environment, Social and Governance, occupiers are demanding more from their workspaces. As we move forward in 2022, these areas may need to diversify to adapt to the future of work.”
Councillor Ryan Murphy, chair of Belfast City Council’s City Growth and Regeneration Committee, continued: “It’s really encouraging to see that the construction industry continues to demonstrate resilience in the face of the ongoing pandemic, with a significant number of major schemes either complete or underway. This is good news for the sector and of course remaining buoyant has meant that local jobs have been sustained.
“One of the key priorities within our community plan is delivering significant city centre residential opportunities across all housing types to encourage more people to live in Belfast. Additionally, our Future City Centre Programme is focussed on diversifying how spaces are used within the city centre, as we consider how we move away from a purely retail and office-led model. We want to create a vibrant city that puts the people who live, work and visit here at its heart, so it’s encouraging to see the breadth of development projects across the city as we work towards realising that ambition.”
No new hotel schemes were completed in 2021. The survey found this to be driven by both pandemic-related disruption impacting the tourism and leisure sector and a substantial volume of hotel projects having been completed between 2016-2018. However, a new hotel development began construction in 2021, which is due for completion in 2023. This is the first since a total of 1,200 rooms were finished at hotel projects in 2018.
One retail scheme was completed in Castle Place, creating 34,000 sq ft of space, while work continued on the rebuilding of the listed Bank Buildings.
In the education sector, one student accommodation project was completed in 2021 on York Street, and two further projects continued in the Queen’s area and the vicinity of the new Ulster University campus. One major new start commenced on Nelson Street, an 11-storey building that represents the largest student development since the survey began. Looking ahead, two major education projects are due for completion in 2022 - the Ulster University Belfast campus (Phase 2) and Queen’s Student Centre. These projects are due to be completed by the start of the 2022-23 academic year.
Source: News Letter (link opens in new window)