Date: 02 Feb 2021
Another strong year for office projects helped development activity in Belfast remain relatively resilient in 2020, but there were fewer new schemes started amid uncertainty caused by the coronavirus pandemic, according to a new report released today by Deloitte.
The report, the fifth annual Belfast Crane Survey produced by Deloitte Real Estate, shows a total of 23 major schemes were under construction or completed in 2020, a slight decrease from the 26 projects that were active in 2019 and the 35 under way or completed in 2018.
There were seven new projects started in the city in 2020, down from eleven new starts in 2019.
The overall total includes eleven office developments, four student accommodation projects, one residential development, four educational facilities, two retail projects and one leisure scheme.
The report notes that the impact of the coronavirus pandemic shone a spotlight on a number of pre-existing trends and challenges for the development of the city, including the ongoing shift from a retail-dominated city core to a broader mix and the need for more residential development to meet Belfast City Council’s targets of attracting more people to live in the city centre.
Activity was underpinned by sustained investment in Grade A Office development, with 1.3 million sq ft of new and refurbished space under development or completed, an increase of over 300,000 sq ft on the previous year. However, two-thirds of the new office space remains available to let.
Among the five new office projects started in 2020 were Olympic House, a 148,000 sq ft joint venture between Titanic Quarter and Belfast Harbour, 35DP a 5-storey refurbished office development and The Paper Exchange, comprising 11 storeys and 200,000 sq ft of space.
The report highlights that the move to digital and remote working because of the pandemic has left many organisations assessing their requirements for office space and the contribution offices make to company culture, productivity and value. This is likely to lead to a move away from banks of desks towards office designs with more space dedicated to collaboration and group work.
There were no new residential starts recorded in 2020, demonstrating that the wider residential market continues to develop more slowly.
Simon Bedford, Partner in the Deloitte Real Estate practice, said: “Belfast continued to show resilience, despite a challenging 2020, and while overall development figures dipped slightly, there remained a significant amount of development delivered over the year.”
Deloitte’s research indicates the shift to home-working could change how businesses use office space in the future, which, in turn, may influence how local residential areas are used. This could potentially shape the role of neighbourhood set-ups to create more diversity within local centres.
Mr Bedford added: “Our latest CFO survey showed that home-working is predicted to increase five-fold by 2025. The role of the office could flex to meet shifting demands for collaborative and creative space, as organisations revaluate their needs. And while the pace of decision-making is expected to ease due to the pervading uncertainty, there continues to be ambitious mixed-use developments in Belfast’s pipeline. There remains optimism that the office will continue to play a key role in the future of work, in a hybrid model alongside rising home-working.”
Suzanne Wylie, Chief Executive of Belfast City Council, said: “Deloitte's Crane Survey shows that Belfast has demonstrated incredible resilience in the face of the Covid-19 pandemic. And we’re continuing to build on the success the city has enjoyed in real estate investment in recent years, engaging with investors and developers through our ‘Renewed Ambition’ collaborative events programme between council and our private and public sector partners.
“Belfast continues to be regarded internationally as a city on the rise and we’re determined to weather the challenges posed by the pandemic so that we can achieve the ambitions we’ve outlined in our Belfast Agenda through significant investments including the Belfast Region City Deal. Securing real estate investment delivers on new jobs and allows our city to evolve to meet the needs of everyone who lives, works and studies here."
There were two retail developments under construction in Belfast in 2020 - the Bank Buildings, and the redevelopment of the former DV8 premises located opposite. Work also continued on the redevelopment of Odyssey Pavilion complex, representing the sole leisure scheme in this year’s survey.
In the education sector work continued on the Ulster University Belfast campus, with completion now forecast for September 2021. Queen’s University also continued its development programme, including the Queen’s Student Centre and completion of the McClay Library extension.
There was one major new student accommodation start in 2020, with Botanic Link in the south of the city breaking ground, and one major completion, a 430-unit development on Little Patrick Street.
Mr Bedford added: “Beyond the pandemic and the implications of the UK’s EU exit, the challenges facing Belfast are the same ones that existed before. There has been an acceleration of some issues, but fundamentally, the shift from a retail-dominated city core to a broader mix of uses is well underway.
“Growing the city centre population remains a priority for the city and it is very positive that a number of schemes are now in the pipeline. But the pandemic has also enhanced the need for a greener, healthier city with better spaces for playing, walking and cycling. Belfast City Council recently announced plans to explore how it can support returning 30% of the city centre back to nature by 2030. Getting this right should both help the city centre to be more ‘liveable’ and sit well with the global challenge of climate change.”