The vision for Belfast set out in Belfast City Council’s 2035 Belfast Agenda strategy is impressive. It says: “Belfast will be a city reimagined and resurgent. A great place to live and work for everyone.
“Beautiful, well connected and culturally vibrant, it will be a sustainable city shared and loved by all its citizens, free from the legacy of conflict.
“A compassionate city offering opportunities for everyone. A confident and successful city energising a dynamic and prosperous city region. A magnet for talent and business admired around the world.”
That vision, while admirable, may need to be reassessed in light of current market conditions and practical constraints.
The market today is best described as mixed, with the interest rate of 5.25% affecting all sectors and the cost-of-living crisis influencing spending habits.
On the upside, the retail market remains resilient, with occupancy in Donegall Place at its highest in 20 years and both Victoria Square and CastleCourt performing well. New retailers such as Pret A Manger, The White Company, Sweaty Betty and Miniso have recently opened in Belfast.
The office market, however, presents more challenges.
The impact of Covid-19 on working practices has been significant, leading to a two-tiered market. Many companies and government bodies have adopted ‘agile’ working policies, which has reduced demand for office space.
Currently, an estimated 1.7 million sq. ft. of office space is available, with known demand for about 140,000 sq. ft.
Upon further analysis, approximately 1.1m sq. ft. of this is grade A, which is where most demand is focused.
The secondary office market will face more difficulties as more leased but unoccupied space returns to the market at lease end dates, further increasing the overall availability.
This trend is similar to other cities, where uncertainty caused by new working practices is impacting rents and yields. In Dublin, the Central Bank says the vacancy rate could hit an unprecedented 26%.
One area of the market which seems stronger is serviced offices, which attracts higher occupational costs but offers tenants greater flexibility.
In addition to established players like the Scottish Provident Building and Urban HQ, there have been several successful new developments including The Kelvin, Custom House, Thomas House and Pearl Assurance House, all developed by local companies.
Given the expected returns in the office market and the refurbishment costs required to achieve an A or B grade in ESG (environmental, social, governance) criteria, it is likely many office buildings will be repurposed for alternative uses.
There is strong demand from other sectors, including student housing, residential sales and build-to-rent properties, hotels, aparthotels, health, hostels, mixed-use spaces, educational facilities and distribution centres.
We know Belfast has fewer residents in the city centre compared to similar-sized cities and encouraging more city centre living seems like the obvious way to address the gap left by the office market, while also boosting the local economy.
To foster the opportunity of repurposing buildings, it is crucial to develop a new strategy for government assistance.
With multiple stakeholders involved, including Belfast City Council, government agencies, Belfast Harbour Commissioners, Translink, Invest NI, Planning Service, NI Water and developers — some of whom own significant sites — streamlining coordination is essential.
Establishing a unified body akin to the former Laganside Corporation, tasked with overseeing development, would greatly aid in realising Vision 2035.
Such a centralised approach would enhance the city’s appeal to investors and facilitate strategic investment into Belfast.
To catalyse the development of vacant buildings, the government must explore strategies to incentivise further growth. For example, reconsidering rating, offering tax breaks and urban development grants to accelerate repurposing of vacant buildings.
I would also like to see it confirmed that there will be no rent caps on residential lettings to encourage the supply of residential accommodation.
Perhaps the biggest move that could be made is to commit to decisions within two months for planning applications.
The Planning Service has faced criticism from the Audit Office and must regain the trust of the development community, who frequently express frustration over the system’s delays and lack of responsiveness compared to elsewhere in the UK and Ireland.
It’s apparent that the Planning Service likely requires increased funding to function optimally but the planning policy for the city centre also requires updating to stay on top of evolving trends. Planning policies often lag behind swiftly changing markets, technological advancements, and cultural shifts.
Belfast City Council has a crucial role to play in revitalising the city centre — which appears weary and could greatly benefit from a rejuvenation effort, including its public realm.
There’s also an opportunity to enhance the city’s environmental credentials, but to do so effectively, the council must adopt bold and innovative proposals, introducing more trees, green open spaces, green walls, and rooftop greenery could transform the cityscape.
The 2035 vision may yet be achievable, but it’s clear there is a lot of work to do before it becomes a reality.
Doug Wheeler is a consultant at commercial property agency Lambert Smith Hampton