A listed building in the heart of Belfast is to be transformed into a trendy 40-bedroom luxury hotel by 2016, it has been confirmed.
As revealed in the Belfast Telegraph last month, the Hill family — owners of the luxury Galgorm Resort outside Ballymena —bought the imposing Scottish Mutual Building for conversion into a hotel after it was put on sale by the Republic’s ‘bad bank’, Nama.
The building was sold for £2m — after a bidding process starting at the £1.75m asking price — and the family say they will spend £12m overhauling it into a four-star boutique hotel.
Brian Lavery, managing partner of property agents CBRE, which looked after the sale, said: “Scottish Mutual is very much a character building and a landmark of Belfast and Donegall Square.
“Therefore we are very pleased to see that it will be coming back into use as a successful commercial building.”
The Hill family are, coincidentally, the former owners of Ten Square Hotel, another boutique venue in Donegall Square, a stone’s throw from the Scottish Mutual building.
The hotel will employ up to 180 people, while another 100 jobs are expected to arise from its design and fit-out. The company said it plans to build two bars and two restaurants, including a Parisian-themed venue with an outdoor garden.
Meanwhile, the upper three floors will be converted into 40 bedrooms and 10 serviced apartments.
Project manager Colin Johnston said: “This truly magnificent, iconic city centre building has all the key ingredients — location, beauty, space and heritage — for a welcome and sympathetic restoration into a luxury, boutique hotel designed to accommodate the hospitality needs of everyone in the city, from discerning tourists, local socialites and diners to businesspeople with an eye for a quality venue.”
He said the project was a “significant” investment in the city. And if plans are approved, the company said it hopes the conversion will be finished by the end of 2015.
Michael Williamson, a consultant at ASM Horwath, said he believed the elegant Scottish Mutual building would lend itself well to housing a hotel. He said that by the time it was completed, the hotel could be well placed to take advantage of Belfast’s ability to attract more and more visitors.
“The city could be in a position where it needs more accommodation, especially with the planned extension of the Waterfront Hall, which could drive more conferences and business visitors,” he said.
Mr Williamson added the building’s location in Donegall Square, close to the headquarters of Danske Bank, Ulster Bank, First Trust and a major branch of Bank of Ireland, meant it was “right in the heart of the financial quarter”, adding to its attractiveness for business travellers.
He said: “Because the family formerly owned Ten Square, they know the area very well. Having had that success, there’s no reason to doubt that they could do it second time round.”
However, low room rates pose a problem if hotel businesses are to be sustainable, he added.
“In 2012 the average Belfast room rate was £65, compared to £74 in 2008. Despite a very substantial increase in demand in 2012, we are still well behind room rates which we had in 2008,” he pointed out.
“We need to get average room rates up, which will drive profit and sustainability of the sector in the long-term.”
The Scottish Mutual Building most recently belonged to Peter Dolan, a pharmacist from Co Tyrone who amassed a property portfolio stretching from Tesco in Dungannon to an airport in Hungary.
He lost possession of most of his assets in the economic downturn, and the Scottish Mutual was among many which fell under the control of Nama, the institution set up by the Irish government to eradicate toxic property loans from the Irish banking system.
At the moment the building contains shops on the ground floor and offices on its upper floors.