Belfast’s Kilmona Group is close to securing a refinancing deal for close to £100m with Oaktree-backed Fairfield Real Estate Finance.
The company, whose portfolio of mixed-use assets is managed by Causeway Asset Management, had eight offers from alternative lenders, none of which were from Northern Ireland. The winning bid is understood to have a minimum term of three years.
Damian Mitchell, property director for Causeway Asset Management, said at EG’s Belfast Question Time that the company was within 24 hours of closing the deal, but he did not reveal the front runner.
He said the deal calmed worries about Belfast’s attractiveness to investors following Brexit: “It’s just under £100m – it’s a big cheque. We had eight offers, compared to two years ago when we had two offers. That’s very encouraging from our point of view. If you follow the money back, a lot of it is backed in America.”
It is understood that the loan would be used to take forward further speculative redevelopments for Belfast city centre to meet demand for grade-A office space.
Belfast urged to take connectivity to the next level
Belfast’s ambition to become a smart city will require a greater focus on development and connectivity outside the city centre, a panel heard at EG’s Belfast Question Time last night.
Roland Shaw, general counsel for Citi’s legal department in Belfast, said that although, as an occupier, Citi had been attracted to Belfast because of the digital connectivity in the city, that is not enough anymore.
He said: “People work from home a lot more and we can’t overlook outside of Belfast or outside of major hubs. Frankly, in the UK, connectivity in rural areas is poor and Northern Ireland isn’t any different. It’s not just about the smart city in Belfast.”
We asked Shaw a few questions:
As an occupier, what are the main things you look for in a city?
We’re a regulated organisation so we have to look at the regulatory environment. We obviously have to look at the digital network – we process billions in transactions every day – appropriate skill and talent, a pipeline of talent, a good education system.
Why Belfast?
Ultimately its value proposition. There’s the obvious real estate benefits from a cost perspective and a wage cost benefit, but the key thing really is the availability of talent. There’s a very strong education system and we bear the fruits of that.
What impact did Brexit have on your strategy in Belfast?
From a Belfast perspective, it really brought the focus into London and maybe accelerated the execution of some of our location strategy, so we gained roles from our colleagues in London. Our growth strategy in Belfast was aggressive and became a bit more aggressive as a result of that.
What needs to improve for Belfast to attract more investors?
The global economy needs to engage in a period of prosperity so that the investors are willing to make capital investments, especially around location strategies. I think Belfast and Northern Ireland are a bit modest about self-promotion. Some items such as corporation tax rates can really facilitate investment in NI in terms of attracting people to the table to consider Belfast. Once you can get them to the table, I think our value proposition is incredibly strong.
What more needs to be done?
For the industry to deliver what occupiers need, Damian Mitchell, property director at Causeway Asset Management, said developers need to adapt to technology at a faster pace and add an “extra level” of specifications to buildings’ designs.
Work started in September at Causeway’s Chichester House, which will be the first building in Belfast to be rated by digital connectivity rating system WiredScore.
James Collier, development manager of city centre developments at Belfast City Council, said more needs to be done for the public and private sectors to tackle connectivity together. “Are our council systems, is our data, are our people suitably clued up, ready to engage with this agenda? In some cases we are, and in some cases we aren’t,” he said.
These developments would be particularly important because some of the fastest growing sectors in Belfast are fintech and cyber security.
Simon McEvoy, director of Belfast office agency at Savills, said: “This year alone there are four or five cyber security companies coming to Belfast. At the moment, with the cyber attacks, it is probably one of the most interesting industries to be at the forefront of.”
With the UK’s impending exit from the EU, Joanna Robinson, a partner at Pinsent Masons, added that firms in Dublin are looking to set up a base in the UK. Low costs and low rent mean Belfast has the potential to benefit from that if it has the connectivity and infrastructure to support expansion.
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
