The Northern Ireland hotel sector has continued to perform strongly throughout the third quarter of 2024, despite broader economic challenges impacting the commercial real estate market.

CBRE NI's latest market report reveals that RevPAR (Revenue Per Available Room) increased by 8% in Belfast and across Northern Ireland during the first nine months of the year compared to the same period in 2023.

Key highlights from the third quarter include:

• High-Profile Acquisitions: The Armagh City Hotel was brought to market with a £9 million price tag, while the Lodge Hotel in Coleraine was acquired by McKeever Hotel Group. Additionally, Patrick and Edmund Simpson purchased Da Vinci's Hotel in Londonderry, and a consortium acquired the Londonderry Arms Hotel with plans to transform it into Ireland's first whiskey hotel.

• New Hotel Openings: The Foundry Hotel opened its doors in Belfast's Cathedral Quarter, further enhancing the city's hospitality offerings.

While the hotel sector has remained resilient, other sectors of the commercial real estate market have experienced slower activity due to political and economic uncertainties. Investment transactions totalled just £4.2 million in the third quarter, a significant decrease compared to the previous year.

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The office market, however, saw a boost from the inclusion of three serviced office centres, resulting in 140,096 sq ft of take-up during the quarter. Nevertheless, occupier demand remains selective, with a preference for high-quality, ready-to-occupy spaces.

Brian Lavery, Managing Director at CBRE NI, commented: "The performance of the hotel sector in Northern Ireland has been exceptionally strong throughout 2024. Despite broader economic challenges, we've seen substantial investment and development activity, reinforcing the confidence investors and operators have in the region's hospitality market.

"The combination of new developments, refurbishments, and key transactions demonstrates the continued growth potential within this sector.

"While Northern Ireland continues to experience pockets of growth, market sentiment remains tempered by economic headwinds and uncertainty surrounding the forthcoming Labour Government budget.

"With borrowing costs still high and investors waiting to see the full impact of predicted fiscal policy changes, activity levels have slowed across several sectors.

"However, we are optimistic that the upcoming Budget and potential public spending initiatives could revitalise key areas. There is significant capital waiting in the wings, and we expect a more active final quarter of 2024."

While retail remains a challenging sector, recent new openings and upsizing by H&M, Deichmann, TK Maxx and Apple point towards a more rejuvenated Belfast City Centre core. We are aware of other new amusements planned for 2025 which should provide further retail choice across the city.

The industrial market in Northern Ireland, like much of the UK and Ireland, has been subdued over the last quarter. There has been an increase in stock available over 20,000 sq ft, with demand for larger warehouse units slowing, while demand for units of less than 10,000 sq ft continues to remain strong with a lack of accommodation available in this size bracket.