Combining field-work with data
As most people know by now, Ortus began life with a focus on financing pubs. For various reasons (none of them related to alcoholism) the management had experience in the sector and this combined with an under-supply of finance for the sector, made it a sensible area to get into.
However, financing pubs was also attractive because they are, by definition, open to the public. So, as a lender you can try before you buy. In the early days this meant having some lunch or a beer in the pub and just watching how it worked. Usually the results were far more revealing than any business plan or set of accounts. Was the place welcoming? Was it clean and tidy? Did the staff seem motivated? Was there a good mix of customers or a just a few of the manager’s mates glowering at all-comers?
As our business has grown, we’re no longer able to do this for all pub cases … but at least it’s an option. And this isn’t the case with most businesses.
However, it is the case for countries and jurisdictions and we have used this to our great advantage as we’ve grown our business in Northern Ireland.
Rather than rely solely on reports and commentaries, we have spent countless hours walking around the streets and speaking with our ever-growing network of introducers and professionals. This has given us the confidence to build our book.
What we see is a vibrant and busy place – especially in Belfast. Hotels are often booked-up, shops are buzzing, bars are full and the general sentiment is positive. It can be a shock when you’re accustomed to London because people do try to have a lunch-break and lots of places close at 5pm, but this is a cultural thing … and not necessarily bad at all.
Despite our determination to rely on our own field trips research, we do however take comfort from the words of proper professionals. In this regard, we were pleased to read the Savills NI Market Research Report which landed in our inboxes today. Some key highlights:
- Despite a stronger pound for much of the year, the value of goods exports from Northern Ireland continued to rise
- The announcement of a lower corporation tax rate – to come into effect in 2018 –will make Northern Ireland a more attractive destination for international investment.
- 2015 saw more than £500m worth of property deals transacted in Northern Ireland. A key driver of this was the return of rental growth in both the prime retail and office markets.
- Although total office take-up of 310,000 sq ft was lower than that recorded in the previous two years – due to a chronic shortage of Grade A space – four transactions in excess of 10,000 sq ft demonstrate the strong demand for large prime offices. Indeed, Savills is currently aware of at least eight occupiers with prime office requirements in excess of 15,000 sq ft.
- Northern Ireland recorded the fastest house price growth of any UK region in 2014 and this trend continued in 2015 with average prices up 8% year-on-year.
So, you could say the Savills report is an evidenced and researched confirmation of the “gut feeling” you get walking around Belfast. If you had the choice, you would probably base your decisions about Northern Ireland on the Savills report … for obvious reasons … but at Ortus we’ll always be glad we walked the streets and formed our own views too.