Let’s turn low values into opportunities

Some months ago, we reflected on how the Belfast office market had hit a perfect storm with regards to decreasing demand, falling prices and over supply. The picture, however, would have been a very different one if we had walked around Belfast city centre just seven to 10 years ago.

New offices were rising up, new hotels were in planning and student housing was on the close horizon. It may not have been a heyday, as such, but Belfast was seen as the new place to visit. Cathedral Quarter and other areas were buzzing, the streets were full of shoppers and Michelin Stars were flying around like ninja stars in a bad Kung-Fu movie.

This is very much at odds with the city centre today, though, with massive vacancy in office space, generally reduced activity in the central business district due to hybrid working patterns and, unfortunately, an increasing level of homelessness and drug use on the streets.

Previously, Belfast city centre seemed immune to recessions and economic cycles due to the high number of government offices in the centre and the fact that it was one of the largest employers, keeping it protected from employment fluctuations. Now, we would estimate that the government occupies less than 30% of the space that it historically utilised, fewer office-based workers are on the streets to patronise local merchants and services generally are zapping vibrancy from the area.

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However, we must look forward to finding solutions that restore prosperity, rather than allowing inactivity or apathy to prevail. Our services sector is still strong, along with our professional sector and office occupiers in these sectors are moving to more efficient floor plates and often more vibrant and employee-welcoming spaces.

Many private corporations are prioritising office work, although some remain flexible on the days. Can we now look at hybrid working and find solutions to some of Belfast’s problems?

Take the congestion traffic problem which plagues Belfast at present, for example. This is really only evident on Tuesdays, Wednesdays and Thursdays, which could be solved by employers requesting attendance at the workplace on Fridays and Mondays to at least help spread the load and alleviate the problem.

We probably do now need to recognise that occupancy rates are unlikely to return to pre- pandemic levels, while local authorities and central government need to make up their minds as to whether they will ever need their workforce back to the office. And, if so, where.

If collectively we recognise that hybrid working is here to stay and occupancy rates are unlikely to return, we need to move forward and replace those outdated occupational spaces. We need to find ways to collaborate at private and public levels to encourage growth and create success in the private and public sectors for our workers and citizens.

A useful change could be in giving implied planning rights to developers who may wish to change office buildings to either hospitality, healthcare or residential. Planning authorities in the remainder of the UK have acted on this, with implied office to residential use not requiring formal planning permission.

There is also much talk of the difficulties in providing both water supply and waste water disposal. I would have thought that now was an excellent time to fully map the resources of the city centre and large-scale vacancy should also provide some capacity to other areas to allow development.

Should we not be identifying key sites that can help the city centre and concentrate getting the correct utilities to those areas? Is it time for local government and councils to utilise their powers to take in sites that have been underutilised for years that could be the target for city deals and look at central government funding to encourage development?

It will not happen without collaboration between private and public making proper wide-thinking partnerships. Until this happens, it is my opinion that promoting investment and occupation into the centre, whether that be in Washington or Cannes, is pointless without solving the infrastructure problems first.

CBRE NI’s role and the role of other advisers will be to provide data-driven input and strategic resources to help those understand the issues, raise awareness, develop advocacy efforts and drive the case for change.

We need to make these decisions now and act where market conditions are soft, and values are low, so that we will be in a better position to execute plans and enhance prosperity when conditions improve.