Geoff Sharpe, Head of Corporate, Danske Bank
Brian Lavery, Managing Director, CBRE Northern Ireland
Nuala Gallagher, Director, City Centre Regeneration, Belfast City Council
Anthony Best, Director, Lacuna Developments Ltd
Rajesh Rana, Managing Director, Andras House
Richard Buckley, Editor, Business Eye
RB – So, Belfast City Centre regeneration….what has been achieved. Can I ask each of you for your personal perspective?
BL – I think a lot has been achieved but I also think that we’re trailing a
bit behind some other regional cities. Cardiff for example has tied in its Transport Hub with the Sports Stadium and totally regenerated that area and many others have used media clusters to promote jobs and development. I think we’re on the right track, but we are far from being the finished article.
AB – Think where we were ten years ago after a brutal recession and it’s clear that we’ve achieved a lot. We shouldn’t be shy about acknowledging what we have done. We’ve started but we certainly haven’t finished. We have to keep moving forward at pace.
GS – I would echo that. Belfast has had some £3 billion invested in it over the past decade. It has the fundamentals of a city that can achieve a lot more….with a young workforce, double digit growth sectors, a new university campus. There has been a lot of change and there will be a lot more.
RR – Regeneration is a broad term and there’s no doubt that a lot has been achieved here. We’ve been through a bit of a mini boom since mid-2016 and it will be interesting to see what happens next.
NG – It is an exciting time. There has been some really good progress….
Ulster University development, student accommodation, and many new hotels. There is a lot more to do but we’re on the right track. Regeneration is about how development positively impacts on the city and its residents in a social, economic and physical sense. We have some very significant targets in the Belfast Agenda, the city’s first community plan running up to 2035, around growth of employment opportunities and population. We’ve a lot to do, but we’re up for the challenge.
RB – What are the key targets that you mention?
NG – The overarching target is to grow the city population by 66,000 people
and have our economy support 46,000 additional jobs. This will require increasing the investment that we have coming into the city. Across all of this, a priority for the council is reducing deprivation in parts of our city…growth has to be inclusive.
AB–And we have had a surge of development in Belfast, evidenced by the number of cranes on the skyline. What’s important now is trying to maintain the pace. As Nuala has said, it’s not all about numbers. You can develop new hotels, but you need to think about who’s going to work in them and where they’re going to live. It’s a broad picture and a lot of different factors need to be considered.
RB – What are the priorities when it comes to regeneration?
AB – Spatially, the area from the city centre south, going down Great Victoria Street towards Queen’s, needs new focus. With the new Belfast Hub there
is a massive opportunity to bring investment into an area that really needs it. And Anthony is right, we do need a joined up approach in terms of skills and bringing people into the city to live.
GS – It’s important too that we have a clear infrastructure strategy. It’s good to see a transport hub and transport strategy, but developments like the Yorkgate Interchange are crucial.
AB – Bringing people into the city to live can help with transport problems. Belfast is different from other cities in that no one wanted to live in the city because of our legacy issues, and that’s only changing now. But we still have a bit of work to do to make this a 24-hour city.
BL – It’s definitely in our opinion the next piece of the jigsaw for Belfast. The residential offering is very important. At the moment, finding city centre accommodation for a young workforce coming into our IT sectors in particular is very difficult. That has to change.
RB – How important is that for the City Council?
NG – It’s very important and we’re working with the private sector, Housing Executive, Housing Associations and other stakeholders to make it a priority. We have to look at issues of land availability, getting the right mix, as well as the necessary infrastructure to support it, such as open spaces, etc. The ultimate aim is a vibrant and cosmopolitan city centre. Tourism plays an important role too. There are more hotels coming forward and that’s very welcome, but we’d also like to increase our tourist offering in the city, helping support existing retail, food and beverage and the night time economy.
RR – We have to decide what we mean by city centre. One issue we have is that the retail core is pedestrianised. That goes back to the security cordon that was built in the 1970’s. Pedestrianisation works well for retail, but only for retail. Any business that stays open after 6 pm isn’t going to work in parts of Belfast city centre. I think we need a study on pedestrianised areas and how many of them we really need.
RB – The new university campus and the opening of student housing is all happening quite quickly, isn’t it?
AB – We opened our first big scheme at the old Belfast Met building in 2016. Since then we’ve opened Dublin Road and we’ve got a couple more sites to come on stream. It’s a new concept for everyone in the city, but it has huge potential, it does bring investment and it takes a bit of the pressure off areas like the Holy Land. What should happen is that areas like that can be returned to mixed use.
BL – It’s disappointing that Belfast can’t deliver a major project like the Yorkgate Interchange, which has been put back to 2020.
RB – That’s an issue for government. So how big a problem is it that we don’t have a working administration at Stormont?
AB – It’s the elephant in the room, isn’t it? It certainly doesn’t help. We’ve been through a lot and we tend to get on with it. But Brexit, the border, the Executive…..it’s not a great combination, is it? If you’re asking an investor to compare between Leeds, Manchester and Belfast, Belfast doesn’t have all of its ducks in a row. On the positive side, though, we’ve got real opportunities.
BL – I think we’ve been able to get through the past year without too many negative effects, but once it creeps past a year, it’s a problem. Even if it all starts again soon, we’ve got a backlog of a year when no decisions have been made. We’re continually embarrassed and making excuses for lack of progress from our politicians.
GS – When we talk to our customer base, both here and elsewhere, it is number one on the agenda. That said, there is a resilience amongst the business community and a willingness to get on with things.
NG – It’s by no means ideal for any of us. The Council has kept on working and we keep spreading the message that we’re open for business, continuing to promote the city for investment regardless of what is happening at Stormont.
RR–There is a lot to be said for councils like Belfast having power over regeneration and transport issues, taking the job away from an Executive that isn’t working. The big councils in England have those powers.
RB – What about the planning process? Has it improved or is it still a problem?
AB – There has been a bit of a shake- up and, to be fair to the Council, it has stepped up to the mark and not shied away from the issue. It’s fair to say, too, that it’s not all one- sided. The quality of applications hasn’t always been up to scratch.
RR – But it’s a lot better than it was when it was under the civil service.
NG – Planning came across to councils a couple of years ago and, as with any new functions, that comes with challenges but we are working hard to improve things. We’re trying to promote planning as an enabler forthe city. Planning has always been seen either as a magic bullet or a scapegoat. But it should be about good partnership, early engagement and both the private sector and public sector working together for a better city.
RB – What about the transport infrastructure?
NG – Belfast Rapid Transit coming on stream in September will be very positive. We want to increase the population and employment offer and the city won’t cope well if we don’t radically improve public transport.
GS–But you only have to come in on the M1 or M2 in the morning to realise that we’re still a rural geography and one in which people are dependent on their cars. So there’s only so much that can be achieved by better public transport in and around the city.
BL – Are we not coming back to the same problem? Without government, these decisions aren’t going to be made.
AB – We’ve also got a mindset to change, I think. You can put on the very best public transport but the mindset is to walk out of the door and jump into the car. It’s a cultural thing and it’s hard to know how we might change it.
RR – People make transport choices in different ways. If public transport is quicker, comfortable and affordable, then I think people will use it. But there is no doubt that we have a car society here in Northern Ireland and it’s going to be hard to change habits.
RB – How is the office market, Brian? BL –There is definitely demand. We’ve identified a 250,000 sq.ft requirement this year alone, and a lot of organisations are looking to update and improve their offices, never mind the inward investment companies. So there is a lag between new build offices and the existing demand. We believe the new Northern Ireland Investment Fund may help this and it’s not dependent on pre-lets being in place, it does
apply to speculative investments.
GS – We feel that the market has been very active. The average over recent years has been around 400,000 sq.ft of lettings a year. As a bank, we’ve funded a number of city centre developments. Weaving Works on Ormeau Avenue is a recent one, and it will be occupied by First Derivatives. It’s a great example of an old industrial building that has been developed into offices for a leading edge corporate. One of the challenges is that imbalance between supply and demand, and we are a bit less mature than other cities when it comes to pre- letting. To fund office development on a speculative basis is still a challenge, particularly with long lead-in times. That makes it all the more encouraging when pre-letting does take place.
RB – The Belfast City Deal…. how important is it?
AB – It’s a game changer. It’s a huge amount of money and it can help across the board. Fundamentally, it allows the council to mould the city as it wants and it’s vital to knit the city together through partnerships. It’s a huge fillip for us.
NG – It’s a City Region Deal so it’s Belfast and the five surrounding council areas and it equates to a billion pounds of investment coming in. It has been a game changer in cities like Glasgow, and I think it will help bring forward significant growth and employment opportunities.
BL – My only question would be around responsibility for regeneration. Cities like Glasgow had those responsibilities at city level, whereas we don’t. But maybe the City Deal can help to sidestep that?
NG – We’re working very hard with the central government and its relevant departments. I think we can make it work at a local level. Certainly, there is a willingness from all sectors to maximise the benefit that we can get from this deal.
RB – This will be a big year for the hotels sector. But where will we be once the new ones have opened? Do we need more and what about tourism in general?
RR – I think we’re in a good place. The fundamentals are strong. The Belfast Waterfront is doing well on conferences and they need more hotels in particular to meet demand. And there are other positives. July used to be a dead month….now it’s one of the busiest. This year will be interesting with a 30% increase in hotel bedrooms. It’s not all good news. The Capital of Culture not going ahead doesn’t help and people were confident that Ireland would win the right to host the Rugby World Cup. And we do need another visitor attraction….maybe one built around Game of Thrones.
NG – Additionally we had over 97 cruise ships last season and we’re scheduled to exceed that this summer. But we’ve got to keep building on all the good work that is being been done by Tourism NI, Visit Belfast and others and try to increase the dwell time and spend profile of tourists coming into the city. Tourism accounts for 5% of our GDP, across the UK and in ROI tourism GDP is almost double that, so we need to continue to grow the offer.
AB – What about licensing laws and Sunday trading. Are those a continued problem? Visitors staying here at weekends have their breakfast on a Sunday, head out into Belfast and find that nothing is open until 1 pm. It’s not great, is it?
RR – The licensing laws are a problem and Hospitality Ulster have done a great job highlighting the problem. As for Sunday trading, there’s no doubt that visitors find it odd that the city is closed for a good part of every Sunday.
RB – Are there opportunities as a result of Brexit, or is it a negative?
BL – I think there will be opportunities. But we need to be smart enough to be able to play it the right way. We have had quite a few enquiries from hedge funds for example, who are considering Belfast ahead of Dublin for operational reasons. We need to identify the opportunities early.
AB – There may be opportunities, but a lot of that will lie with the Executive
or lack of it. It’s all about who is steering the ship. We have to be quick on our feet to find and take any opportunities.
NG –If any region is going to benefit, then Northern Ireland must be in a prime position. But we must be ready to take up any opportunity, having an Executive in place would help enormously, however within the council it is business as usual and we are working hard to position and market the city to avail of any opportunities that may come forward.
GS – We ran a series of events for business customers across Northern Ireland recently, and what came through was that many of them are focusing on opportunities around Brexit, as well as potential threats.
RB – Are the banks stepping up to the mark when it comes to funding regeneration?
GS – I can only answer for Danske Bank, and we have certainly stepped up to
the mark – and continue to do so. We’ve committed £500 million over the past four years to a wide range of projects in the hotel sector, residential sector and office sector. Weaving Works, I’ve already mentioned….The Gallery on the Dublin Road, and other hotel projects. Where there is income and cashflow, we’re likely to have an appetite for lending.
RB – What are the obstacles to progress, aside from the ones we’ve already mentioned?
AB – I think that the funding landscape has changed beyond all recognition. The banks are more active as Geoff has said, but there is a reliance on companies with strong equity available to back up available lending. That can be a challenge.
BL – I agree. But there is certainly demand for the right product. Belfast Harbour is an example. They built two office blocks without the need for lending and they’ll both be fully occupied by Easter of this year. Those new offices have improved that part of the city….but we also need them within the city centre itself. I fully understand why banks may not want to fund speculative developments, but we do need that kind of funding.
NG – We recognise that funding gap, and the council is keen to help where possible and appropriate with the City Centre Investment Fund. We’re also aware that there is a lack of available land for development and a surplus
of surface level car parks, and we are keen to work with the private sector to see how we can help vacant land come forward for development. We’re also looking at council land to assess what areas are appropriate for development.
RB – To wrap things up, what would each of us like to see happening here in Belfast over the next couple of years?
RR – The future is bright but I’d like to see a more joined up approach between the government agencies to boost regeneration. Getting the legislative framework back up and running would be a big help.
NG – The City Region Deal is a potential game changer that will encourage growth in development and employment opportunities. Growing tourism is essential, it would be good to see the proposed new visitor attraction the council are leading on come forward. We’d like to build on what’s been achieved and also ensure regeneration benefits existing Belfast businesses and residents, and local connectivity is improved across the city, promoting meaningful inclusive growth. Finally we want to make real progress on increasing the residential offer within the city, with quality housing and mixed use schemes coming forward.
BL – City living accommodation and grade A office space are both important next steps for Belfast. But we also need some cohesive thinking from the Executive on other unique benefits that may come out of Brexit.
AB – Three things. The City Deal producing results, a dynamic and stable Executive and some certainty around Brexit. If we had all three of those, the rest would fall into place.
GS – Broadly speaking, we appear to be in agreement that this city has some serious potential. Going forward a bit, we’ll have a new student population and more people living in the city, we’ll have a new transport hub, maybe a second major tourist attraction and perhaps more Grade A office projects coming out of the ground. There’s no doubt that a lot can be achieved.