‘End on a high note’ is always sound advice for any organisation hosting a major business event. Thankfully, we managed to do that at our recent annual CBRE NI Outlook event.
With over 500 guests in the room having heard from our team of CBRE NI experts about the challenges facing our industry, they will no doubt have left the ICC Belfast buoyed by our announcement that we are bring a major investment asset to the market.
Belfast’s first low carbon aparthotel, Room2, has been offered for sale with a guide price of £21.2 million.
Having opened in October 2023 following support from the Northern Ireland Investment Fund, the city centre hotel runs on 100% electric and low-carbon renewable energy, making it one of the greenest aparthotels in northern Europe.
Its credentials are numerous – currently ranking at number one on Tripadvisor – meaning the asset will no doubt attract significant attention from parties hoping to invest and do business in Northern Ireland.
And any potential investors in attendance at Outlook may also have been heartened by the video message delivered from Michigan by Spencer Levy, CBRE’s Global Client Strategist and Senior Economic Advisor, who provided a forecast of what may lie ahead throughout 2025 in the wake of the Trump inauguration.
Spencer reflected on what he sees as the three most pressing policies – tariffs, taxation and immigration – but predicted that the new US administration will take a less extreme position in these areas than what was suggested by the media in the run-up to the election.
The spectre of Trump, and what he may deliver, has, of course, loomed large for some time, significantly impacting many areas of the global economy.
The commercial property market has been no exception, with uncertainty about what is to come feeding into a host of other factors that meant our annual analysis of how real estate has performed during the previous year did not make for hugely positive reading.
What is somewhat more upbeat, however, is the outlook which our CBRE NI sector specialists have for the year ahead. While our 2024 H2 office report revealed a ‘mixed bag’, with a strong third quarter followed by a weak Q4, there are reasons for optimism for landlords.
The focus on employee wellbeing and sustainable design is reshaping demand and influencing the future of the office market. With effective strategies, 2025 could see a stronger and more resilient office sector in Northern Ireland.
After a robust start to the year, the local investment market experienced a downturn in 2024, with the volume of investments introduced to the market falling from £340m in 2023 to £123 million last year.
There are, though, some indications of a more resilient market in 2025. We anticipate a rebound in investor interest, even if investors are likely to remain sensitive to pricing and sector dynamics.
With analysts predicting further reductions in base rates, this is likely to create favourable conditions for commercial real estate investment.
Looking at the living sector, challenges still remain, including increasing sustainability requirements and higher debt costs.
However, Belfast, with its strong growing student population and housing shortfall, presents a compelling case for future development and investment.
The retail market enjoyed mixed fortunes in 2024, which was a year of challenges and transformation for the sector as it faced a complex combination of economic headwinds and shifting consumer trends. Having displayed its durability last year, new developments and sustained occupier interest provide optimism that 2025 could present promising opportunities for growth and reinvention.
In the industrial sector, sadly, there is very little to report with the age-old problems – lack of available product and the rising costs of new buildings – still persisting.
There is no doubt the market is brimming with potential but, to unlock it, key barriers must be tackled, and innovation will need to be embraced.
Finally, hotels. Room2 arrives on the market on the back of a record-breaking 2024 for the local hotel sector, with £57m invested across eight sales, seeing the market set new benchmarks in both transaction volumes and trading performance.
Revenue per available room rose by 8% in the first nine months of 2024 in Belfast and across Northern Ireland, and this is a trend we expect to continue throughout 2025.
And there’s that ‘end on a high’ approach being taken again.
Brian Lavery is managing director at CBRE NI