Baring, Houston & Saunders - General - UK Property Report Findings

Date: 11 Apr 2000

Despite experiencing political and economic troubles Northern Ireland remains one of the least volatile property markets in the UK. This is one of the more startling conclusions from the latest UK Property Report produced by Baring, Houston and Saunders (B,H&S), the property advisory arm of the ING group.

Between 1980 and 1998, the retail and office sectors in Northern Ireland were the two top performing sectors within the UK property market in terms of total percentage returns per annum. Northern Irish retail tops the table at 18.7% followed by offices at 15.6%. The rest of UK warehouses followed in third place with 15.2% over the same period.

The report confirms that, while recent years have witnessed a convergence in Northern Ireland's average performance figures, they have still consistently outperformed the rest of the UK in relative terms.

B,H&S states that this solid growth performance can principally be attributed to yields and to rental growth. Retail yields in Northern Ireland averaged 14% in 1981 and 10.4% in 1993 compared to national averages of 7.4% and 8% respectively. Within the same period (1980 - 98), annualised rental growth within the office market in Northern Ireland was 5.7% compared to a national average of 1.8% per annum.

The B,H&S report remains optimistic that over the longer-term market consistency is set to continue and Northern Ireland will remain a low risk investment market.

Ian Whittock, research director at B,H&S said: Whatever your reasons for not investing in Northern Ireland, high risk should not be one of them!"

Other highlights in the report include: The number of smaller pension funds investing directly in property has diminished ten years prior to 1998, but larger property portfolios have performed better. Secondary property has almost certainly outperformed prime property as low yielding property sectors have found their yields moving up. Retail property remains out of favour with high street rental growth peaking at only 5.6%. Warehouse rents are expected to bounce back after last years slump. The industrial sector continues to be the best performer. Rents have grown the strongest around London, those in the Heathrow area having almost doubled in four years.

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