The LCN Property Interview: David Gavaghan

David Gavaghan talks to LCN Property about Belfast's commercial advantages, why high-speed rail and other infrastructure could unleash the city's enormous potential, and how he might have had a very different career as a stuntman.

Based in Belfast, David Gavaghan runs a business that is seeking to raise capital for commercial real estate projects in the city. He talked to LCN Property about Belfast’s commercial advantages, why high-speed rail and other infrastructure could unleash the city’s enormous potential, and how he might have had a very different career as a stuntman.

How did you get into the property sector?

I’ve been involved in property in one way or another for most of my career. Originally, I was in commercial banking in the City of London and moved into project finance for Hambros Bank, where we did a lot of ‘sale and lease backs’ of various properties with a tax angle. I left after they were taken over by Societe Generale, and helped to set up a finance boutique in the West End where we did a lot of real estate financing, largely through public private partnerships and the use of private finance. I was heavily involved in student accommodation. The business grew into one of the most successful financial advisory businesses in London.

I then came to Northern Ireland to run the Strategic Investment Board, an organisation in the heart of government that looked at accelerating infrastructure investment across Northern Ireland. Obviously real estate was part of that.

After six years I left and went to Quintain Estates, which was one of the most successful real estate companies quoted on the London Stock Exchange, and ran the fund management business with more than £1billion of assets under management (AUM). It was in very niche businesses, including student accommodation, care homes, science parks, and tertiary and secondary property where there was value. In my time AUM increased to more than £1.5bn.

Then I came back to Northern Ireland a few years later to run Titanic Quarter,  one of the largest real estate waterfront projects in Europe. That was a very exciting project. In 2015 I decided to establish a vehicle to raise private funding for commercial real estate in Belfast. Having grown up in Ireland in the 70s and 80s, and seen the extraordinary transformation of the commercial real estate market in Dublin, I felt there was a real opportunity for something like that to happen here in Belfast over the next decade.

Regrettably, nearly six years ago now, David Cameron announced the EU referendum. Obviously the rest is history! In that environment it has proven  difficult to raise significant sums of money for real estate. And then Covid-19 appeared. I’m still on that quest, but I’ve had a lot of other things to do in the meantime, which has been very exciting.


What exactly was it about Brexit that made things difficult?

The real problem was the uncertainty.

The Northern Irish economy is fragile. If you looked at Dublin in the 70s and 80s and even the 90s, you couldn’t anticipate the extent of the growth and transformation that was going to happen – not only in the capital, but in Ireland in general. We haven’t had that here north of the border. Although the Good Friday agreement was very important for what we have today in Northern Ireland, we actually haven’t had significant economic growth. You could argue, in fact, that we’ve stood still for the past 25 years. Compared to the Republic, which is now one of the richest countries in the world.

What Brexit has done is to create a degree of uncertainty about the trajectory that we were on, and that hasn’t allowed investors to have confidence, for all sorts of reasons. And of course, the politics: the dissolution of the executive after Martin McGuinness stepped down and the massive difference of view as to what the future of Northern Ireland would be, notwithstanding even the border poll. What would Brexit do to the economy of Northern Ireland in particular and the United Kingdom in general?

And that uncertainty continues to this day, with all of the questions around the Protocol. So that’s not a clement environment in which to raise significant sums of money for real estate.

There’s probably a bit more certainty now. But we have a changing political landscape, both north and south. Sinn Fein anticipate being a very significant beneficiary of the May election. And in the south, there’s a very strong sense in which Mary Lou McDonald could be the next leader of the Irish government. So you have all of that, as well as the extraordinary change that Covid has brought about, which arguably could be more important to real estate than anything else.


How has the pandemic affected the commercial environment?

Essentially, none of us know what the level of occupation will be: what hybrid working will look like in the future. There’s no question that the footprint of buildings is likely to reduce, although you do have a countervailing factor with COVID that you actually have to give more space for each human being at a desk. But the really interesting challenge, which requires significant additional investment, is the upgrading of the real estate to meet to meet  today’s climate emergency, with massive reductions in carbon emissions from our built environment.

If you’re an organisation that has proven that it can work well through Covid with people not coming into the office, and then you have to make a major investment in commercial real estate to accommodate your staff, maybe you start to think about a new economic model for your business. Maybe you start to look at offices in rural locations or smaller towns rather than city centres. I’m a convinced person around cities and the importance of cities, not least because cities are actually the most sustainable place to be. But there’s a degree of uncertainty still.

At the heart of it though, I think there is a significant opportunity. There will be a flight to quality and there will be a flight to trying to do your best for staff.


Infrastructure will presumably be critical there?

Yes. I’ve been lucky enough to assist a startup company called Fibrus, which competed for a significant project called Project Stratum and won it, beating Openreach in the process. This was nearly £300 million of funding for broadband fibre across Northern Ireland. And that’s being rolled out right now. So Northern Ireland will be one of the most advanced countries for fibre in Europe, if not the world.

So that is very helpful. But the point that I would come back to – and this is the reason for my passion for high-speed rail between Belfast and Dublin – is that you have two cities that historically have not really related to each other. But if they – to borrow a phrase – “lean into each other”, which they could do, it should be enormously beneficial.

Dublin is without question one of the most pre-eminent mid-sized cities in Europe. Belfast has the potential to become one. It’s currently a small city at about a third of a million, but could grow to half a million or even a million over the next 20 years. If you created that opportunity to bring those two cities together with a journey time of under an hour, you then have a degree of aggregation which becomes globally competitive. You have something which becomes very compelling in a global market.


How is the rail project going?

I’ve been lucky enough to find a very significant supporter for it. And we’ve commissioned one of the top consultancy firms in the rail arena alongside a world-renowned rail engineer, and we are about to complete a detailed report. We have responded to an invitation through a consultation process that is being undertaken by the Irish Government and the Northern Ireland Executive to look at the future of rail on the island, with our focus being solely on the route between Belfast and Dublin. And the Irish Government is also looking at the future of rail between Dublin and Cork. It’s a wonderful project, which potentially would be the largest infrastructure project ever to be delivered on the island of Ireland, certainly in modern times. So that’s a very exciting project.


Do you think Belfast still has an image problem due to the Troubles?

I think the image problem is going: younger people see it in a different light. I was chair of Visit Belfast for a few years. The challenge we had was to change people’s impressions, and as always the best way to do that is to get them here. So we just have to work harder and more courageously and more fastidiously to get people here.

Once you get them here, they love it. You prick the balloon. Suddenly people think, ‘God, this place is just wonderful! Great food, great craic, great pubs, beautiful countryside, wonderful people.’ So that’s the sort of stuff we need to do. We need to do a lot more of it.

I think Belfast really does have enormous potential. In my early years I wanted to compete in the Olympics for Ireland in three-day eventing. And we were hopeless at dressage in Ireland. So I got a Dutch dressage instructor to train my rather unruly horse (not to mention the jockey!). What he taught me was that in training a horse, there are moments when you get things right and you can really feel it: the horse and rider suddenly come together and there is harmony. I use that analogy in reference to Belfast. We have had glimpses of this harmony over the past two decades of this. We need to remember those moments and build on them!

People don’t often realise that, for instance, Citi, one of the largest financial institutions in the world, has a major operation here in Belfast. They operate their global foreign exchange activities out of Belfast, and their head of global foreign exchange is based in Belfast. That’s also because of the capability with our broadband and our  fibre connectivity across the Atlantic (Project Kelvin). So that’s a very significant thing.  In financial engineering and cybersecurity we’re one of the top centres in the world, with huge potential in the coming decades.

These things are not just a promise, they’re reality. And if you can see the reality, you can build on that reality. That is exactly what happened in Dublin. It started with little centres of excellence, and from those centres of excellence you grow the circle.


What would you say are the main differences between the business worlds in Belfast and London?

One of the huge opportunities that we have here is that the senior people in the city generally know each other very well. I would say that I’m pretty plugged into all the key people that you need to deal with, both in the private sector and the public sector. So that’s very helpful. Now, obviously, the same does exist in London, but you’re dealing with a much bigger landscape, and you’re probably in a niche rather than across the piece.

Another huge advantage that I think Belfast has over even Dublin, is you can get around easily. You can actually do five or six meetings in a day quite easily, which in many cities is actually quite problematic. And Belfast City airport is literally ten minutes from the city centre. So you can go to London for a day. Or you can come to Belfast, do your meetings, and be home – all in good order. But of course Covid has changed those dynamics and we need to re-evaluate that.

I think the culture is different too… there’s a hunger here, which also makes a difference. People are paid less. They actually want to see the place change. On the downside, being in the quagmire of our politics does become very tiring and it takes away a lot of energy sometimes. But what you have to do in all those situations – like anything in life – is park it and look for the ways you can make a difference, rather than getting stuck in it.


Looking back on your career, have you had any role models or mentors that shaped your career?

Probably the most important people that I’ve worked were at Hambros. I went there in my late 20s. Hambros is a family bank, and the chairman was a remarkable individual called Chips Keswick. I sat in the tax-based finance unit, and there were three or four outstanding people there who effectively were colleagues, mentors, partners… there was a real sense of team spirit. They’ve had a very big impact on me.

The chief executive of Quintain was a remarkable man called Adrian Wyatt, who created this incredible vehicle. He is an inspirational individual who very early on had a very strong focus on sustainability.

And more recently, Gareth Graham who’s a major developer in Belfast who I’m working with on the train project. He’s a significant role model. But I think that through life, you have many people that you look to, and I would probably say there are various characters that I’ve met over the years who’ve had a big influence on my life. Obviously my parents: both my mother and father have been very important to me. And so has my wife.


What career achievement are you most proud of so far?

I’ve been very proud to be part of some very successful teams.

At Quintain we were one of the leaders in student accommodation, as I said earlier, which has now become a recognised asset class. I was very proud of the work that I did in the Strategic Investment Board. We created the first investment plan to look at the future infrastructure requirements in the Northern Ireland, and to look more holistically at the future of the island of Ireland. I’ve been involved in a couple of really important reports looking at the total infrastructure needs on the island of Ireland, with the Irish Academy of Engineering. I’m very proud of the work I’m now doing on the rail project.

One of the quotes that has always haunted me and been my sort of guiding light is one Mark Twain: “In 20 years time you’ll regret the things you didn’t do, not the things you did do. In 2006 I asked Siemens to look at the potential of a 60-minute train journey. So we’re now 16 years into that. So I hope by that 20th year we will have a real project where I won’t be haunted by the things I didn’t do.


At the very least, you’ll have tried.

I don’t aim to just try, though: I aim to make it happen.


What would be your ideal job if you weren’t in property?

At university, I was very keen to move into fast moving consumer goods. Probably I might have ended up somewhere like McDonald’s or a supermarket.

Alternatively, I might have taken up a career with horses. In my third year at university I did get the chance to become a stuntman, because I could ride horses, but I promised my father that I wouldn’t pursue it. I was in a film called Excalibur, which was a John Boorman film about Merlin. That was a real eye-opener. Liam Neeson was in it, and Helen Mirren. I was effectively doubling for Lancelot and Percival in the film, which was really fun. And it was very well paid!


What are your hobbies?

I’m a very keen runner. I play tennis with my kids, play rugby with the boys. I’m a pretty frequent user of the gym and I row, although I don’t row on the river Lagan – it’s too dirty. I love reading. I meditate every day: I do half an hour in the morning and occasionally if I’m up to it I do it again in the evening. And we have a big family, with eight children. So that takes up a lot of wonderful time.


How would you describe yourself in three words?

Intense. Ambitious. And… I’m trying to abbreviate the phrase ‘learning to go with the flow’ into one word. Maybe ‘detached’.


Which actor should play you in the movie of your life story?

He’s older than me, but I quite like Gabriel Byrne.


Who would be the guests at your dream dinner party?

Mary Robinson. Mel Brooks. Peter Ustinov. Aung San Suu Kyi. Pope Francis. And there’s a lady who’s a very important figure: Etty Hillesum. She was remarkable.


If you could go back in time and give advice to your younger self, what would you say?

There’s a Swahili phrase ‘pole pole’ [pronounced ‘polay polay’] which means take it easy. Literally ‘slowly, slowly’. So that’s what I’d say. Don’t beat yourself up.


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