Office market
A resilient market
Rapid7
Rapid7 is committed to investing in the company’s global expansion, particularly in areas with impressive technical talent such as Belfast. Causeway Asset Management understood our vision and expansion goals and truly partnered with us to develop the right solution for our future success in Belfast.
Jamie Kinch
Vice President of Real Estate & Workplace Experience
The growth of our Belfast office has been a remarkable success story which would not have been possible without the exceptional pool of talent here from both legal and business backgrounds, which has allowed us to create highly skilled and specialised opportunities in Northern Ireland.
James Richards
Executive Director
This move underlines the PwC Executive Board’s confidence in Northern Ireland as a location and the success of the firm here. We will continue to grow in local, national and international markets from Belfast, drawing on the technology skills emerging from our schools, universities and colleges.
Paul Terrington
Northern Ireland Chair and Head of UK Regions
- Prime rents £23 psf
- Availability 763,00 square feet
- Take-up in 2020 140,911 square feet
- Five-year average take-up 482,322 square feet
Office market in Belfast
- Demand supported by a range of occupiers
- Belfast take-up 2019 versus five-year average
Professional services
- 37 per cent
- Five-year average 22 per cent
- Deloitte
- PwC
- MTB
Creative industries
- 32 per cent
- Five-year average 20 per cent
- RAPID7
- Neueda
- proofpoint
Business services
- 17 per cent
- Five-year average 16 per cent
- VENYOU
- MEARS
- SIGNIFY
Notable office deals in Belfast
Merchant Square
Size: 200,000 sq ft
Practical completion: 2020
Occupier: PwC
Erskine House
Size: 100,000 sq ft
Practical completion: 2019
Occupier: HMRC
The Ewart
Size: 209,000 sq ft
Practical completion: 2021
Occupier: Part let to Deloitte (80,000 sq ft)
Allstate HQ, East Bridge Street
Size: 138,225 sg ft
Practical completion: 2018
Occupier: Allstate Investment
Overview of office market
The Belfast office market has been the city’s strongest-performing sector in both take-up and investment since 2015. Five-year annual office take-up average stands at 482,322 sq ft, remarkable given that the 2011 to 2015 five-year average equated to 319,000 sq ft. Rising by almost 200,000 sq ft per year is no mean feat and is testament to the occupational market Belfast has, with modern stock and low overheads attractive to both occupiers and investors. Office take-up has over the past few years gathered momentum, with notable deals including PwC taking over 200,000 sq ft at Merchant Square, the Department of Finance taking 149,000 sq ft at 9 Lanyon Place and HMRC taking over 100,000 sq ft at Erskine House.
The public sector was historically the largest occupier in the office market. However this situation has significantly reduced over the years with a huge rise in the tech, creative and professional service industries resulting in many global organisations calling Belfast their home.
Developments
In recent years, over 670,000 sq ft of office stock has been developed, and Belfast city centre has some of the most modern, Grade A office buildings in the UK. Although speculative development has been limited over the last five years, most schemes have been fully leased by practical completion. Recent completed developments include City Quays 2, River House, The Laser, Merchant Square and The Weaving Works.
Notable office developments in Belfast
The Weaving Works
Completed: 2017
Developer: Karl Group
Size: 30,528 sq ft
River House
Completed: 2018
Developer: Castleforge Partners
Size: 78,000 sq ft
City Quays 2
Completed: 2017
Developer: Belfast Harbour
Size: 80,000 sq ft
Merchant Square
City Quays 2
Completed: 2017
Developer: Belfast Harbour
Size: 80,000 sq ft
Office market prime rents
The current rise in prime rents is forecast to continue. Grade A rents for Belfast equated to £23.00 per sq ft, up some 43 per cent since 2015. This rapid rise in rental values is extremely attractive to investors. However, at just £23 psf for city centre Grade A space, Belfast represents one of the few major cities in the UK with modern office stock at relatively low prices.
Investment
Since 2015, deals worth more than £343.5million have been concluded, most notably Citibank purchasing The Gateway for £34million and The Metro Building for £21.8million, Obel 68 selling for £15.2million in August 2018 and James House selling for £16million in March 2019. Merchant Square sold in March 2021 for £87million, the largest office investment ever sold in Northern Ireland and reflecting an initial yield of 5.20 per cent.
Looking forward
Encouragingly, live requirements for space in Belfast continue as occupiers seek the benefit of the Belfast office market fundamentals. These requirements, if fulfilled, would equate to some 1.4m sq ft. It should be noted that as of March 2021, there is only 1.19m sq ft of available office space but a further 723.629 sq ft of office development due for completion by the end of the year will help to satisfy demand.
Belfast has another 2.7m sq ft of identified office developments which have obtained planning permission and could start in the medium term. The development pipeline offers a great opportunity for investors to secure best-in-class schemes over the next five years and build critical mass within the market. With yields reflecting around 5.75 per cent, office investments in Northern Ireland look well-priced compared to other UK and European cities.
Notable Belfast office investments
| Address | Tenants | Square feet | Date sold | Purchaser | Price |
|---|---|---|---|---|---|
| Merchant Square | PwC | 240,204 | March 2021 | International | £87,000,000 |
| Victoria House, 15-27 Gloucester Street |
various | 58,254 | November 2019 | Private investor | £12,500,000 |
| The Gateway Offices | CitiBank NA | 133,205 | April 2019 | International | £34,350,000 |
| James House, Gasworks | Department of Finance | 111,488 | March 2019 | Government | £16,000,000 |
| Metro Building, 6-9 Donegall Square |
Capita, Yell | 69,611 | September 2018 | Private investor | £21,800,000 |
| Obel 68 | Allen & Overy | 52,169 | August 2018 | Harbour Commissioners | £15,200,000 |
| Ulster Bank, Shaftesbury Square |
The Royal Bank of Scotland Plc |
35,631 | April 2016 | Private investor | £9,890,000 |
| Capital House, Wellington Place, Upper Queen Street |
Northern Ireland Water, Diageo, Capita and Steria |
72,083 | January 2016 | Republic of Ireland investor | £11,050,000 |
| The Soloist Building, Lanyon Place |
Pinsent Masons | 88,000 | December 2015 | UK investor | £14,500,000 |
| Clare House, 303 Airport Road West |
Department of Finance | 66,210 | March 2015 | Government | £8,000,000 |
| Causeway Exchange, 1-7 Bedford Street, Belfast |
Department of Finance | 71,554 | February 2015 | Government | £12,150,000 |
Demand for new space increasing development activity
Notable developments
City Quays 3
Completed: Quarter 4 2021
Developer: Belfast Harbour
Size: 260,000 sq ft
The Ewart
Completed: Quarter 4 2021
Developer: MRP
Size: 209,000 sq ft
Olympic House
Quarter 4 2021
Developer: Titanic Quarter and
Belfast Harbour
Size: 146,746 sq ft
The Paper Exchange
Completed: Quarter 1 2022
Developer: Wirefox
Size: 156,000 sq ft
Thought piece: The growth of tech
It is estimated that around 60,000 people are employed by technology companies in Belfast, making it one of the leading cities in Europe for new software development. The wider Northern Ireland tech ecosystem can lay claim to over 1,200 companies, ranging from large multi-nationals to small start-ups. It is home to global businesses in financial software, data analytics and encryption, access control systems, and intelligent surveillance technologies with occupiers such as Concentrix, Rapid7, Neueda and Proofpoint all taking new office space in recent years.
Supporting all these businesses is a strong network of regional and UK government investment programmes and world-class academic institutions. Queen’s University Belfast is globally-renowned for its Centre for Secure Information Technologies (CSIT), an innovation and knowledge centre for cybersecurity and the largest of its kind in the UK, with BAE Systems, Infosys, IBM and Thales among its partners. Belfast is the world’s number one destination for US-based cybertech investment and is fast becoming a global cybersecurity hub. This sector employs over 1,200 people. With a pipeline of talent, pioneering research and innovation and secure and resilient infrastructure, it will be one of the world’s leading cyber economies by 2026.
These tech companies have excellent reasons to be based in Belfast. Not only does it represent competitive value for money, but it is one of the most technologically advanced cities in the UK. Belfast has invested heavily in infrastructure that supports tech companies.
Add to this an exceptionally talented, young and highly-educated workforce, and it becomes apparent why the business start-up survival rate in the city is 55.3 per cent one of the highest in Europe. Belfast has in place all the elements needed to grow and nurture a thriving tech community.
Both Queen’s University Belfast and Ulster University are investing heavily in electronics, computer sciences and cybersecurity. The region is expanding its economic development efforts, with the Northern Ireland Executive publishing its New Decade, New Approach agreement, which included a call to promote the region as a global cybersecurity hub.
The £1billion Belfast Region City Deal will also play a substantial part in growing the tech sector even further.
