Saudi fund acquires Belfast's Merchant Square for £87m in biggest ever NI office deal

Merchant Square in Belfast.

​​​​​​Ryan McAleer

A RECENTLY completed office block in the centre of Belfast has been sold to a Saudi Arabian investment fund for £87 million in what’s thought to be the biggest ever office deal done in Northern Ireland.

Merchant Square has been sold by Oakland Holdings, controlled by Belfast businessman Gareth Graham, whose family is behind the Sean Graham bookmaking franchise.

Completed last June after a two-year construction project close to Belfast City Hall, the building’s 225,000 sq ft of office space has been fully let to PwC until 2040.

The tenancy is worth around £4.86m per year for the owners.

The building was handed over to PwC at the end of June 2020.

The professional services giant had originally intended relocating its 2,300 staff to the site in the summer of 2020, with plans to eventually house up to 3,000 staff across the nine storey block.

PwC does not have the option to break its tenancy until 2030 and 2035.

The speculative office project was originally financed by Oakland along with loans from Fairfield Real Estate and the Northern Ireland Investment Fund (NIIF).

Managed by CBRE, the NIIF received £100m from the Department of Finance in 2017 to provide debt or equity finance for commercial property.

The money was provided by Stormont’s Financial Transactions Capital (FTC) funding pot, which supports infrastructure projects through loans.

Oakland Holdings announced in late July 2020 that it had signed off in a major refinancing arrangement of the building with Danske Bank to repay the loans.

Guy Hollis of Oakland Holdings said: “We are proud to have created one of the biggest commercial property schemes in Northern Ireland.

“Five years ago, Merchant Square was a concept for a quality speculative building which reflected the demand for office space in Belfast.

“Now built and fully let, it has attracted interest from global investors. Merchant Square is an indication of what Belfast can achieve.”

Oakland was advised by JLL, A&L Goodbody and KPMG; the purchaser was advised by SPS Investment, King & Spalding International LLP, TLT LLP and BDO LLP.