Recently Commerz Grundbesitz-Investmentgesellschaft mbh (CGI) has bought the development of the Victoria Square shopping center in Belfast for its open-end real estate fund hausInvest europa. This is the fund’s first investment in Northern Ireland. According to CGI the investment volume is approximately € 430m.
The project Victoria Square comprises approx. 75,000 m² and is situated in the city center. According to the Belfast Cityplanning department, Victoria Square will be by far the most important development for the coming years.
As main tenant, a leasing contract for 25 years was already signed before building started, with House of Fraser. The shopping center is a development of AM Development. The building activities on the project started at the end of 2003. The project is expected to be delivered in 2007. Until that time the developer will carry the building costs and building risks. The initial return on investment of this inner city development is over 6%.
“The careful permission practice led to a lower provision with modern retail trade areas in Belfast in comparison with other regions of the United Kingdom”, according to Arnold L. de Haan, CEO of CGI. Also the above average growth rates of the Northern Irish economy in comparison with the remainder of the United Kingdom influenced the investment decision. Since the beginning of the nineties, the growth rates in Northern Ireland were around 2% and therefore below the national average. Northern Ireland now mostly profits from the lower salaries compared to other regions. The prognosis for the economic development in Northern Ireland foresees an increasing growth above the European average. “With this investment for hausInvest europa in Belfast, we will strengthen the performance of our fund persistently”, says de Haan.