Real Estate Market Insight
Resilience continues to define the Northern Ireland real estate market, one which offers investment opportunity across the board.
That is particularly true in key sectors such as residential and city centre living, specifically when it comes to student accommodation and the hotel market. Both latter sectors have performed strongly in recent years, with plenty of headroom for further growth. While overall trends reflect the broader UK market, the Belfast region stands out to the international investment community given the fact both sustainability and innovation are built in to that offering. That’s bolstered by the completion of landmark projects, including the Belfast Grand Central Station which enhances the region’s connectivity to the rest of the island and to the world.
Its longer-term potential is certainly impressive and by sharing insights and fostering collaboration across the business community – such as through the Belfast City and Region Place Partnership – we can make sure that ambition is reached.
Collaboration will drive increased innovation, investment and growth right across Northern Ireland, underpinning our competitiveness and boosting our attractiveness, now and in the future.
NI Investment Spend
To be added
2024 Investment Type
- NI HNW/PropCo: 70 per cent
- Property Companies: 11 per cent
- Pension Funds/Institutional: 19 per cent
2024 Investment Sectors
- Industrial: 17 per cent
- Retail: 56 per cent
- Office: 13 per cent
- Alternative: 14 per cent
Prime Yields - graph
- High Street Shops
- Shopping Centres
- Retail Warehouses
- Offices
- Industrial Distribution
Capital markets
Retail was the most prominent sector within capital markets last year, solidifying its position as the most dominant investment sector in Northern Ireland for the third consecutive year. Demand across the board remained strong, with local investors active, accounting for more than 70 per cent of the 24 transactions worth around £118 million, with institutional investors and pension funds representing over 18 per cent . While a relatively subdued performance, indications suggest more resilience in 2025 with stronger investment sentiment expected, particularly given the recent fall in UK interest rates and expectations of more to come.
Office
Take-up in the office market in Northern Ireland jumped by a third last year, with the market experiencing a flight to quality.
There was strong demand for modern high-speciation offices over older stock, with ESG credentials and amenities still high up the priority list.
Available office space stood at 1.26 million square feet, although Grade A space is in short supply and expected to tighten further. Prime Grade A office rents stood at £25.50 per square foot.
Highlights of the year include the granting of planning approval from Belfast City Council for the latest phase of the waterfront City Quays development, a nine-storey mixed-use building which will be known as City Quays 5.
The development will comprise 160,000 square feet of space over nine floors and will be located directly opposite the Belfast Harbour Office.
Student accommodation
Once again the Purpose-Built Student Accommodation (PBSA) sector was a stellar performer in 2024, continuing to grow on the back of strong fundamentals.
Demand from a growing student population has expanded for five consecutive years - and Belfast is now one of the largest full-time student populations in the UK outside London. The completion of the Ulster University’s Belfast city centre campus, significant investments in the Queen’s University Belfast estate, and a boom in student accommodation developments have seen over £1 billion invested in higher education in Belfast over the past decade.
According to the Deloitte Crane Survey, there are around 1,200 student rooms under construction and over 4,000 with planning or at the pre-planning stage, further signs that the momentum in the sector continues to build. The PBSA developments have certainly proved popular with students and have added to the strength of Belfast as an attractive destination for higher and further education. Around 65 per cent of students applying to university for the first time said that the availability of accommodation had influenced their decision on where to apply.
Of note, Queen’s University Belfast has earmarked some £100 million to help meet a supply deficit of around 3,000 rooms from its students.
City centre living
Momentum in city centre living in Belfast continues to grow in response to growing demand for residential accommodation.
Residential development in Belfast city centre has been dominated by Loft Lines - a landmark scheme in Titanic Quarter. It is the first major build to rent development in Belfast and will deliver 800 homes when complete in 2026.
The potential in the sector is significant as the current student population – one increasingly used to quality purpose-built student accommodation – matures. Meanwhile, Belfast City Council has selected GRAHAM as its long-term private sector partner to work alongside the council to deliver residential-led, mixed-use, sustainable developments across multiple sites.
With an overall development potential of around £630 million, the initial partnership phase leverages strategic council-owned city centre sites with a development value of £280 million, which will deliver mixed tenure homes to help meet the needs of those wishing to live in the city.
The approach will help drive forward city centre living and housing-led regeneration across the city.
Retail
Over the past year, Belfast has seen the arrival of a number of new retail, leisure and hospitality brands, some of which are first-to-market and first-to-island brands. Recent additions include The Ivy Restaurant, Amelia Hall on Howard Street, the German footwear company, Deichmann, at the Keep; Menswear brand Charles Tyrwhytt and ladies fashion brand – Marella have both opened on Arthur Street.
Another trend we saw was local hospitality brands, including Bodega Bagels and Neighbourhood, opening new city centre locations.
Meanwhile, Belfast City Council’s £1 million Vacant to Vibrant Grant Scheme in the city centre has committed grant funding to 41 applicants, reactivating previously vacant city centre units by SMEs or Independents, with 21 of these being in heritage buildings, including the recently opened awardwinning Golden Thread Gallery on Queen Street. The City Council has also just widened the Vacant to Vibrant Scheme to include arterial routes in the wider council boundary area after securing an additional £500k of funding.
Industrial and logistics
The continued growth of online shopping has continued to underpin the industrial and logistics sector in Northern Ireland, with strategically-located warehouse space finding strong demand from occupiers.
A lack of stock remains the overriding feature of the sector, with potential for investment across the region, particularly at sites close to major cities and strong transport links. In line with that demand, rental values have edged higher, with interest in properties with strong ESG credentials highly sought.
Hotels
Northern Ireland’s hotel sector is going from strength to strength, notching up a record-breaking year in 2024. The investment market recorded £57 million across eight major sales in what remains an active market.
That upward trend looks set to continue in the coming year amid a raft of new developments, refurbishments and benchmark transactions. Of note is the nine-storey 175-room aparthotel room2 in Belfast, one of the greenest aparthotels in Northern Europe, which has come to the market with a guide price of £21.2 million.
Overall, the underlying fundamentals of the hotel market are reflected in average room rate for the year of 10 per cent - the only region on the island of Ireland to deliver double digit growth – and a 9 per cent increase in revenue per available room.
Occupancy rates have also held strong above 80 per cent and, with a buoyant outlook for the tourism sector for the year ahead, that trend looks set to continue. Industry data also points towards sustained growth from key visitor markets. Unsurprisingly, with approximately 2,000 bedrooms across 14 hotels receiving planning approval since 2020, further hotel developments are anticipated across the city centre.
Tourism
The resurgence of the tourism sector across Northern Ireland has been impressive in recent years, with tourism expenditure continuing to break new records, and there is still room for substantial growth. Momentum is set to build in the coming years with the Department for the Economy announcing plans to double the size of the local tourism sector over the next decade.
In addition, both domestic and external tourist arrivals are growing year on year. Research by Tourism Northern Ireland has shown that expectations amongst the industry are for visitor volumes to increase in 2025, paving the way for development and investment in the hotel sector and other tourism-associated industries. That is evidenced by the arrival on the market of room2, the 175-room hotel on Belfast’s Queen Street, and demand for more bedspace in cities such as Lisburn and Newry.
There is continued diversification in the hotel market and further delivery of apart-hotel and accommodation, catering for longer-term visitors. There were a number of hotel approvals over the last 18 months and a growing trend in the reuse and adoption of historic building stock.
Other recent developments include The Flint (as part of £11 million investment) on Howard Street in Belfast; the recent opening of The Foundry on Hill Street in Belfast and the opening of VOCO Belfast in the Gasworks, the first VOCO hotel on the island of Ireland.
The tourism offering in the Belfast region is also continuing to strengthen, with the consultation period recently closing on initial design concepts for the landmark Belfast Stories visitor destination. Due to open in 2030, the £100 million multipurpose destination will include a world-class, interactive and immersive visitor attraction that tells the stories of Belfast; the people and the place in the heart of Belfast city centre.
