“I’ve never found property much fun,” says Sean Mulryan quietly but resolutely. “It’s an extremely tough game, and one that is a lot easier to get wrong than to get right.”
The comment hangs in the air for a second; Mulryan’s strong Irish lilt adding to the melancholy that has crept into the first interview the chief executive of developer Ballymore has given in nearly a decade.
His words neatly shatter any illusion that everyone who has achieved great success in their career must have been driven, in part, by a series of japes along the way to make it all worthwhile. Not for him, he says.
Despite his success – the 56-year-old is one of Ireland’s richest men, boasts of owning more land in the capital than any other private company and is developing Embassy Gardens at Nine Elms in Vauxhall, one of the fastest-selling London residential projects of the year, launched in September – fun is reserved for life outside of work, “for sport”. And he’s pretty clear about that.
It could be an Irish trait, he says, to separate work and play so dramatically: “When it comes to business, we prefer to keep our heads down and just get the job done.”
Whatever the reason, it has paid off as Mulryan’s strict focus combined with his astute business decisions and regular 90-hour weeks have seen Ballymore skyrocket.
He reveals that the past nine months have already seen the firm’s best year in its 30-year history, despite the property crash and collapse of the Irish economy in 2008 resulting in the firm slumping to a £224m loss for the year ending March 2010. In accounts for the year ending 2011, the group reported this loss had been reduced to £115m and turnover had risen to £150m from £115m in the previous year.
Now, as he prepares for one of Ballymore’s busiest five-year periods to date, the famously media-shy millionaire, who started out life as one of seven children born into rural poverty, is ready to talk.
He reveals everything from his plans to expand high-profile developments in the capital to gearing up to be the first Irish firm to emerge from Ireland’s controversial National Asset Management Agency unscathed.
Surviving Nama
In the 30 years since Mulryan set up Ballymore when he was 26, crossing the Irish Sea to enter the London market was the most important decision he has ever made. The second most important decision was to return to that market before anyone else after the crash of 1991.
“I was the first one in after that awful period from 1987-1991, with 30 units in Camberwell and a move to east London in 1994, with 250 units at Dundee Wharf,” he says in his “box” – his term of endearment for the Design Cube building tethered to Docklands’ South Quay and Ballymore’s HQ.
“There were no cranes anywhere, and it was a lonely experience at first. To give you an idea of how depressed the market was at that time, we were actually given a grant to build 200 units in Brick Lane. But all the evidence and planned infrastructure suggested to me that London was on the cusp of becoming a world city. And I have been proved right. By the time it was an area where everyone wanted to be, we were well established.”
The firm’s London landbank could now accommodate a total of 20,000 homes and is the “backbone” of the business. This backbone saved the group from a much bleaker outlook as it struggled through the aftermath of the 2008 property crash and the fall of the Irish banks.
Like most other developers – and the Irish companies in particular – Ballymore was hit severely by the crash and ensuing financial downturn. Turnover plummeted by more than half for the year ending 2010, down to £115m from £270m in 2009, and the majority of its assets, valued at an estimated €1.5bn (£1.26bn), came under the ownership of Nama – the body created by the Irish government in late 2009 in response to the Irish financial crisis and the deflation of the Irish property bubble.
“It was Easter 2008, that I knew,” he says. “It became quite obvious there was a huge problem, though I don’t think anyone could have contemplated the scale of it back then. But I knew it was bad. At that time we had 1,800 flats under construction in London, and three developments which were 80% sold with 20% deposits, and we couldn’t go forward because the Irish banks were in such trouble.”
Unlike many of his peers, Mulryan freely admits that his first reaction was to panic. “I don’t think panicking early is the wrong thing to do if you then take the problem head on and deal with it aggressively,” he explains. “That’s what I did.
“We stripped the company back to basics, and I went back to working 90 hours a week around the clock trying to renegotiate agreements. It was a long two years.”
But it paid off. The long hours, cutbacks, and that all-important London landbank, saw Ballymore pull off a remarkable recovery. The group was understood to have reduced its debt by more than 50% by January this year through an aggressive plan of sales, refinancing and joint ventures. Mulryan confirms that the group is on track to be the first out of Nama by 2015-16.
He keeps his thoughts on the body brief and extremely guarded. “It has a difficult job. I can only look at it from our perspective, and we have a reasonable working relationship. It takes time to get these organisations in order and to get people in the right places. But I think they are getting there with it now. It’s a process. Like I say, we have a reasonable working relationship. Reasonable.”
Reading between the lines, and the “reasonables”, it does not feel as though the process has been an easy ride. But then, given the nature of the situation, one would not expect it to be – whether Nama was the most well-oiled machine in financial history or not.
Either way, Mulryan remains tight-lipped on the matter, and is more comfortable talking about what he thinks will be the major differential between the companies that are able to emerge from Nama unscathed and those who will not – a firm foothold in the London market.
Ballymore’s London lifeblood
The capital is where Mulryan will be firmly focusing his attention over the next three years.
The majority of the company’s turnover – 65% – comes from the London market and has seen Ballymore deliver the best financial year in its history in the past nine months alone. Mulryan does not see it slipping. “London will stay robust for the next 10 years,” he says confidently. “Residential supply has been very low for a decade, so the demand is there, and most people in the world want to come here to own a bit of the city.”
Ballymore’s development portfolio has got pretty much every corner of the capital covered (see above), though when it comes to eyeing sites, Mulryan says he tends to focus on water and public transport, with 90% of the firm’s schemes near those two things.
“We have gained planning for over 7,000 resi units here in London since January,” he says. “Some of that land we will sell with the planning permission, as our target is around 1,250 units a year, meaning our landbank outweighs that demand considerably.”
The jewel in Ballymore’s crown is Embassy Gardens, SW8, next to the relocated US Embassy. The 2.6m sq ft scheme comprises 2,000 flats, and the first residents are due to move in by 2015. The project will regenerate a chunk of the South Bank from Vauxhall to Battersea, offering a wharf-style living space complete with New York-warehouse inspired open-plan interiors.
The 1,000 sq ft flats priced at £950 per sq ft will be characterised by more open brick interiors, higher ceilings, simpler tiling and a more hotel-suite style set up.
“We have removed circulation space and opened up the space, which hasn’t really been done before in larger London resi units,” says Mulryan.
The new style is what buyers are after, if the sales figures are anything to go by. Some 400 of the 650 phase-one units have been sold, including 160 over a two weekends in April – one in Hong Kong and one in Singapore. “Agents have told me this has been the best-selling residential development in London this year,” says Mulryan.
“A big part of that was getting the US Embassy to relocate there from Mayfair, and it has sold excellently. As for the style – interiors change, like fashion. And cars. Take the Ferrari; an example of great design improving all the time. That’s what we are trying to achieve.”
Home and away
While Ballymore is now in the comfortable position of being able to work on perfecting the Ferraris of London residential development, the Irish market is a different story.
Just 15% of the group’s business is done in Ireland, and Mulryan concedes it remains a difficult market. But he insists that things are now on an upward trajectory.
“Four years into the cycle and we have hit the bottom now,” he says. “There are signs of recovery – though it will be very slow. But the housing market is starting to move again, there has been some new investment in technology, and building businesses in Dublin are starting to build again. We are seeing first-time buyers starting to buy homes and I really do believe we are on the road to recovery.”
This might be the case in Dublin, but what about the rest of the country? Is there a pan-Ireland recovery on the cards? Mulryan concedes not. At least not for a while.
“The main signs are in the greater Dublin area and other highly populated towns where people are starting to spend more,” he says.
But it is not enough of a recovery for Mulryan to invest any more time and energy in Ireland than he is doing at the moment. Nor will he be upping Ballymore’s current presence overseas for the time being – the group has projects in Prague and Bratislava – as a result of the push to develop in London. “We may eventually look at Brazil or some of the emerging economies, but not for the next few years,” he says.
Mulryan spends 80% of his time based in the capital to facilitate the plan, increasingly living away from his stud farm in Ireland to oversee everything down to the very last detail.
“Most of my time is spent here in the box looking after current and future developments,” he says. “Down to the handles on the doors and the flushes on the toilets, I am involved. People have no idea the amount of time you have to put into a product to make it 10% better than anything that has gone before.
“On Embassy Gardens you wouldn’t believe the time we spent here working on the finer details – the flooring, the lights, the taps, the tiles, the baths, the ceilings, the storage areas. I work all the time, and when I am not working I am watching sport. Gaelic football, rugby and horseracing are my top three,” he pauses to catch his breath.
“Sport dominates my weekends completely and totally,” he says before adding finally, quietly and resolutely, “That’s my fun.”
Sean Mulryan, one of Ireland’s richest men, has piloted developer Ballymore to become one of the biggest private owners of land in London. It’s all down to business, not pleasure, he tells Emily Wright in his first interview for nearly a decade. Portraits by Tom Campbell
Mulryan on…
The men he admires: “I have a lot of time for Berkeley. Tony [Pidgley] came all the way up from zero. He is a great operator. Then there is Steve Morgan at Redrow. I’d put my money on his shares. He knows the game. He’s very good.”
Secrecy among the Irish developers and contractors: “I think it’s a bit to do with our background. We’re a little bit shy, the Irish.”
Starting off as a bricklayer: “It gives you a real edge to have actually physically done it yourself – built with bricks and mortar. Then you learn the design aspect and then you start to oversee projects. I think certain people, including financial institutions, will recognise that’s the best background in this business.”
Building Ballymore
On top of the 2.6m sq ft Embassy Gardens project in Vauxhall, the developer’s major projects include a 44-storey, 360-unit tower by Canary Wharf, E14 – 180 units were sold in Asia two months ago, and the remainder will be put out to the UK market in early 2013 – and Arrowhead Quay, a 750,000 sq ft office scheme in Docklands which is likely to be switched to a residential development, with planning set to be submitted before Christmas. Other key schemes include Minoco Wharf, E16, 21 Wapping Lane, E1, and Old Spitalfields Market, E1.
