2015 SEES £65 MILLION OF LICENSED PROPERTY TRANSACTED
19 November 2015Earlier in the year, we reported on how renewed confidence on the part of developers and investors was leading to resurgence within the local property market across all sectors.
In recent weeks, the hospitality sector was boosted by news that the Hastings Hotel Group had been given the go-ahead to create The Belfast Grand Central, a new, 200-bedroom hotel through refurbishing and extending the 24-storey Windsor House office building in Bedford Street. Upon completion, the development will also comprise 16 serviced apartments, ground floor retail space in addition to refurbished office space. The £30 million investment is expected to generate 150 new jobs in the sector when up and running in 2018.
Barely a stone’s throw away from the site of the planned Belfast Grand Central, construction work began in September on the Bedford Hotel, a 70-bedroom boutique hotel which will have two restaurants and a large banqueting hall. Known formerly as the Scottish Mutual Building, the £13 million project which is backed by the Hill family, owners of The Galgorm Resort outside Ballymena, is due to open in October 2016. The Galgorm itself has also recently undergone a £10 million extension and refurbishment proving that investment within the hospitality sector extends beyond Greater Belfast.
All of this is welcome news and a tremendous boost for our hotel trade, but what is happening elsewhere in the sector in terms of property transactions and developments?
As we approach the end of 2015, we can report that over £65 million worth of licensed property sales have taken place locally with approximately 80% or more occurring within the Greater Belfast area; this includes the former Holiday Inn and Fitzwilliam Hotel.
In our last round-up, we stated that while there had been a reduction in the number of distressed sales, we envisaged further receiver/administrator-led sales in the short term. Last month brought news of the impending sale of three of Belfast’s best-known bars. The Botanic Inn, on Belfast’s Malone Road, the King’s Head, Lisburn Road and Madison’s bar and hotel on Botanic Avenue which are due to come on the market. NAMA, the Republic’s “bad bank” is selling the three properties, formerly part of the Botanic Inns Group, which went into administration in 2013. We anticipate that there will be huge interest in these high-profile properties and potentially competitive bidding resulting in a sale price well above market value.
Another notable property up for sale is popular Belfast night spot, El Divino, which opened for business four years ago. The 1000-capacity, Laganside venue was recently refurbished to the tune of £1million and again we expect significant interest from prospective buyers.
Beyond Belfast, the sale of The Clarendon Bar, Strand Road, Derry has just been completed and new owner, Michael Taggart, has ambitious plans to add another name to the Derry scene to feature alongside Grannie Annie’s (formerly trading as Bound for Boston) and the former Beckett’s Bar, which is set to undergo refurbishment.
Outside the two main cities, transactions are taking place although quality and values are at a level well below Belfast. Almost £10 million worth of sales occurred beyond Belfast and Derry during 2015 equating to a dozen or more pubs sales proving that there is a market for good pubs and hotels, however, vendors need to be realistic regarding their price expectations. Notable sales included the Belmont Hotel, Banbridge which sold for over £900,000 and the Ramada Hotel, Portrush, which was sold for over £3 million. The provincial licensed outlets run a fine line between success and failure as we witnessed following the recent closure of the Portaferry Hotel which relied heavily on the indigenous population, tourism and local attractions to survive.
Overall, this has been a strong year for the licensed sector with the further emergence of new operators seeking to increase their market share. We expect that 2016 will continue in a positive vein with a reduction in distressed sales and the normalization of sector as an increasing number of willing sellers and operators invest money in new projects such as the Belfast Grand Central and the Scottish Mutual Building in addition to more cyclical public house upgrades.