Belfast Telegraph

Ambitious visions to build on the Titanic success story

Titanic boss David Gavaghan tells Margaret Canning about his ambitions while travel chief Martin Craigs describes his desire to increase Asian visitor numbers

Titanic Quarter chief executive David Gavaghan has revealed significant further ambitions for the waterfront development, from a casino to an outpost for a global university like Harvard or the Massachusetts Institute of Technology.

The development attracts visitors for leisure and work - including film studios and the Northern Ireland Science Park.

And while it topped the news agenda in 2012 when the headline-grabbing Titanic Belfast opened in time for the anniversary of the maritime disaster, work on Titanic Quarter is far from complete.

Two years into the top job, father-of-six Gavaghan, whose duties extend from property development to promoting the area as a tourist attraction overseas, also said he regrets the sale of his company's loans by Ulster Bank to a US fund. Around £64m in loans relating to Titanic Quarter offices and apartments - themselves the subject of litigation triggered by falling property values - were swallowed up.

The funds were sold to Davidson Kempner as part of Project Achill, as the bank rids itself of the property loans which have been a drag on the profitability of parent company Royal Bank of Scotland.

But the deal also represents the end of a period of uncertainty for Titanic Island Ltd, which raised Ulster Bank's loan sales as a sticking point in its most recent accounts.

Mr Gavaghan - a man who's credited with 'energising' the Titanic Quarter since he took up the chief executive role in July 2012 - said things remained the same.

"We still have the banking terms which we agreed with Ulster Bank and they remain in place.

"We were sorry Ulster Bank sold their loans. We wish they hadn't.

"But from our point of view, overall the introduction of all this foreign money into Belfast has to be a good thing.

"And who knows - maybe in five years time Ulster Bank will have the appetite for large-scale property lending again.

"We have very good relationships with our bankers and intend to continue to have very good relationships with our funders."

During an interview with Business Telegraph covering his hopes for the future of Titanic Belfast, Mr Gavaghan confirmed he has spoken to Davidson Kempner representatives about their future relationship.

And he revealed that the chairman of Titanic Belfast, Pat Doherty - the head of ultimate parent company Harcourt Developments - hoped to launch a luxury boutique hotel on the site.

The Donegal man already operates the Redcastle and Lough Eske hotels in his home county, as well as the Wyndam Grand in London and Macdonald Townhouse in Manchester. But he does not have any hotel properties in Northern Ireland - and if his plans go ahead, Mr Gavaghan said the hotel would have 'Titanic' in its title, and would be a luxury boutique hotel with 84 rooms.

The film side of Titanic Quarter's business also has room for growth, Mr Gavaghan said. Titanic Studios - formerly known as the Paint Hall - has been used for the filming of HBO fantasy series Game of Thrones for the past five years, as well as a range of other feature films.

Mr Gavaghan said: "Game of Thrones is a most amazing piece of serendipity for us, which we couldn't have seen at the time."

Since filming began on the first series, it has become the most pirated series of all time. And fans from all around the world have also travelled to its locations around Northern Ireland.

In August this year, Environment Minister Mark H Durkan granted planning permission for two new film studios.

Mr Gavaghan said: "Disney and Universal with Northern Ireland Screen and the Weinstein brothers (Bob and Harvey, the producers behind movie hits like The King's Speech and Philomena) have looked around the space and said that if the studios were here today, they would come.

"England is full and there's no more capacity for studio space. HBO could not have been more complimentary about what we have done here."

In fact, he said the company hopes to start work on the new film studios - plus 60,000 sq ft of work space and office space - early next year, with the aim of creating a 15-acre film campus.

Mr Gavaghan said: "Game of Thrones has been here for five years. There's a lot of nice crossover and a lot of people who come here stay in our residential apartments and our hotel (a Premier Inn) and obviously that creates its own momentum."

He credited film producer Mark Huffam, who produced 10 episodes of fantasy epic Game of Thrones, and a string of other movies shot in the region, with acting as an ambassador for Belfast and Northern Ireland. "He's been a great star for Northern Ireland."

He said he had also looked at enticing casino operator Rank but acknowledged that until a licence is granted for a casino in Northern Ireland, and political opposition to the move is overcome, those ambitions will remain castles in the air. "Given the story of the ship I think there would be a resonance to have a casino."

The Northern Ireland Science Park, home to dozens of technology companies, is another facet of Titanic Quarter Ltd's success.

"The Science Park also has huge potential. It already has 200,000 sq ft and could have another 50,000 sq ft," said Mr Gavaghan.

"We can work with the Science Park to up that presence, and we've been talking to Queen's and the Ulster University about extending that footprint."

But the scale of his ambitions for third level education aren't limited to home.

"We could attract a global university with some appetite for a European base. Let's be ambitious - Harvard, Massachusetts Institute of Technology, or a really good Chinese university," he said.

Yet like any property development company, the last few years haven't been a bed of roses. Parent company Titanic Island made a loss of £33.9m in 2013.

Values of the remaining development land were assessed at £39.1m at the end of December last year - compared to £72.7m a year earlier. A Premier Inn hotel on the development was also sold last June for £6m.

However, the company report said: "The directors consider that the losses in all probability represent the nadir of the challenging market conditions that have pertained until recently."

Mr Gavaghan said he shared the hope that the worse was over, and that there had been a turnaround in the last six months.

"There has been a big increase in property value and the apartments, for example have increased significantly in value in the last six months.

"Like most property companies, you have to look at your assets and take a prudent view.

"Our shareholders are very rational investors."

It recently achieved a rent of £15 per sq ft on office space - which he said hadn't been achieved before in Northern Ireland.

"If rents can reach £17, £20, then our shareholders can make some sensible return on their investments," he added.

Attracting big name office tenants figure highly in his future plans, and he said he would love to see firms like Deloitte, EY and PwC - which have all announced massive expansions in recent months - set up home at Titanic Quarter.

But he said there was no conflict in those ambitions with the Harbour Commission, the landlord of the Titanic Quarter land - which is occupied by the company on a long lease.

Both are seeking office tenants for their new developments, as well as seeking operators for hotels.

There are plans for 190,000 sq ft of office space in a financial services centre, while the separate Olympic Building between Belfast Met and the Public Records Office will also contain offices.

Financial services is another arm of the massive development.

The 650,000 sq ft financial services centre will be ready in 2016 or 2017. "It's not yet occupied but we are talking to a number of people," Mr Gavaghan said. "The prospects for that would improve if corporation tax powers were devolved."

There were plenty of selling points, he said. "We have fantastic black fibre and great proximity to the City Airport."

While property values have not been kind to the development, there is fire in his belly.

The land was once known as Dargan's Island, and part of it as the People's Park, and Mr Gavaghan said he hoped he would live up to its billing once more.

There are 5,000 people living in the quarter, and he hopes to double that, and increase the numbers working in it to 30,000.

With 15,000 students at Belfast Met at present, he'd like to double that to 30,000, and see up to 5m visitors every year.

As for the continued drive to attract office tenants and investors, "the challenge we have like all property developers is how good is your offer".

"It's up to Citi do decide, Allstate or Deloitte - all we can do is create a location and let the market decide," he added.

Belfast Telegraph

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