2015 Has Been a Landmark Year for Hotel Investments in Northern Ireland
Wednesday 6th January 2016
2015 has been a breakout year for the hotel industry in Northern Ireland, with investors flocking to grab up property in the area. Almost half of the investors last year came from North America, with many more foreign investors now paying attention to the market.
Major UK investment firms like CBRE have backed these decisions, claiming the increase is from buyers confidence founded in the fact that Northern Ireland has a shortage of hotel rooms. With the expansion of the Waterfront Conference Centre in 2016 expected to increase demand even more, the potential for investors is still on the up.
In 2015 this was further explained by the Minister of Enterprise, Trade and Investment Arlene Foster, who said there is review-based evidence of a lack in the 4 and 5 star hotel space. She also claimed that research indicates a shortage of 1,000 beds by 2020.
The demand will also be helped by increasing tourism for Northern Ireland, with a friendly pro-growth policy in place already. Overnight visitors in 2011 were at 3.6m, which was a high at the time. It has increased year on year ever since, hitting 4.55m last year.
Belfast hotels in particular have been thriving in recent times, with the Belfast Telegraph reporting an occupancy rate of near 80%. This and the increase in visitor numbers is widely believed to have sparked 2015's landmark year of hotel investing. Transactions in this sector amounted to near £70 million ($105m) last year.
Tourism spending is another area expected to increase as the still fertile 4 and 5* hotel space grows, along with increasing hotel rates, higher visitor numbers, and more large events such as the 2019 Golf Open.
New construction is always a possibility to fill this demand. It gives freedom to build to your liking, and design for the intended purpose. It can be expensive too though, and with construction times you will have to wait a while to get returns on the investment. This could have a larger pay off in the long run, though you need to check all the factors properly of course.
The more popular method for investors has been to purchase and renovate existing buildings. Major companies like Lagan Construction have been involved on a massive scale with the renovation and refitting of such properties, including Park Inn Hotel and the Hilton Belfast.
The popularity of this option is lower costs, and quicker return on investments. You can get into the hotel business while the demand is high, and make the most of it sooner. With the upcoming increase 2016 could push the highs of 2015 even further, and see more cash flowing into Northern Ireland's hotel industry.
Editorial Contact Details - Conor Shilling
conor.shilling@angelsmedia.co.uk
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