2019 has been a year of “what if’s” and “maybe’s”. What if Theresa May got her Brexit deal through parliament? Maybe we will get an improved Brexit deal by October? What if we got a People’s Vote? Maybe not.
The last 3 ½ years have been challenging but, without doubt, 2019 has peaked on the uncertainty barometer having been littered with events and non-events. This time last year, investors were already starting to hold their breath in anticipation for the March deadline, which of course came-and-went. Understandably, who would make significant decisions when a further wait for some degree of certainty, could be more than justified. Then the October deadline came-and-went only to be replaced with a January 2020 deadline. Cue general election and a drastic change in the political landscape.
So, how has all this turbulence affected investment volumes for 2019? Prima facie, they look reasonably good but, as with recent years, the figures are boosted, if not reliant, on a small number of larger deals. Investment volumes for Northern Ireland will exceed £200m with key deals including the recent acquisition of Sprucefield Retail Park by NewRiver Retail (£40m), the sale of Crescent Link Retail Park to a Manchester-based property company (£30m) and the purchase by Citibank of its headquarters in Belfast (£34m). These three deals alone account for over £100m.
While 2019 volume actually represents an improvement on last year’s total of circa £180m but it should be noted that 2018 saw the lowest investment volumes since 2013. For further context, 2016 and 2017 saw volumes of circa £275m and £350m respectively.
It is fair to say that business has performed resiliently despite the lack of an Executive: unemployment is at a record low and wages are the fastest-growing in the UK. Also, we should proudly shout that we are still officially the happiest ranked nation in the UK.
Looking to 2020, we can now say we have certainty. Well, to a certain degree. We can now be certain that we are leaving the EU and that it will be on Boris’ terms. Of course, that’s not the end of it; we have a brief window to negotiate a trade deal with the EU. We also now know that our freshly-emboldened PM plans to enshrine the 2020 Brexit date in law, hence leaving with or without a trade deal.
A more forensic analysis of the 2019 property market will no doubt prove interesting but how does all of this tee-us-up for next year’s activity? Perhaps it is too early to say, but in spite of the local and national challenges, I cautiously anticipate an increase in activity in NI and right across the UK. Talks have just recommenced to get the Executive back up-and-running and perhaps, this time, we have reason to be more optimistic on the outcome. And property investors, whether buyers or sellers, have been waiting for a long time to get back to business. So, progress on Brexit should be the key to unlocking investor decisions, increasing supply and improving activity during 2020.
