Building for the future

West Cork man Greg Coughlan has made his mark as one of the country’s leading developers as chief of Howard Holdings with major projects at home and abroad, reports Kyran Fitzgerald.

THIS week, the largest commercial construction project to be completed in Cork City was unveiled by property company Howard Holdings.

The flagship project is being touted as the trigger for a massive redevelopment of Cork’s 400-acre docklands area.

Howard Holdings has been run for many years by Greg Coughlan and Frank Gormley. Group managing director Greg Coughlan surprisingly pours some cold water on the hype surrounding docklands.

“The docklands thing is a bit far fetched. The IAWS owns the majority of the land and until they are willing to develop it, there is little point talking. It will take hundreds of millions (of euro) to provide the necessary infrastructure from roads to flood alleviation. You can’t expect the developers to pick up all the tab for that.”

Mr Coughlan makes it clear he is disgruntled at the lack of tax incentives. “They (the Government) are categorically saying no.”

And what has city manager Joe Gavin, a major force in the city’s revival, had to say about this: “An explanation is not available,” he says, adding that it has “probably been made clear to him by central Government. It is up to the people of Cork to fight for incentives and to set up a steering committee.”

Some may feel developers of his ilk have done very nicely on the back of tax breaks. Others may wonder why Dublin’s docklands has cruised along on

a wave of such incentives while Cork is left to fend for itself.

On the prospects for the Irish property market, this most seasoned of developers is somewhat tepid. “The entry to Ireland is probably prohibitive in value terms.

The market has probably peaked in certain areas.”

It will all be about location. In this regard he believes Cork is well placed with the population of the greater Cork area expected to grow from 250,000 to 400,000 by 2020 as the Government’s national spatial strategy operates to impose limits on the size of the capital.

In the short term, he believes that there is demand for 150,000 to 200,000sq ft of office space, in Cork. Howard Holdings is a relatively low-profile entity, but one with big names on board, including its longtime banker, Anglo Irish Bank.

Its directors include Brendan Murtagh, who along with his brother, Eugene, built up Kingspan plc into a major force in the construction business.

Another director is Frank Boland, one of the leading figures in Cork business. He is a former chairman of the Harbour Commissioners and president of the Cork Chamber of Commerce. Mr Coughlan comes from Ballydehob, West Cork, attending the local national school. He went to Rochestown College before studying engineering at the Crawford School of Technology in Cork.

Also on the board is accountant Ronan King. As for Greg Coughlan himself, not a lot is known about his personal life. His wife, Ann Barnett, is from Schull. What is disclosed is that he first cut his teeth in the family joinery and building business alongside his father and uncle. He later ran a building company, Greg Coughlan Construction, for some years.

In 1985, he started up a small development company, Headway Properties, along with Frank Gormley. The pair traded on the back of the boom of the late 80s that followed hot on the heels of financial deregulation in Britain.

Eventually, Headway was backed into a British property plc, Howard Holdings, in what amounted to a reverse takeover. Howard Holdings had a modest impact in stockmarket terms.

In 1998, it reported pretax profits of £345,000. In August 2001, it reported a pretax loss

of £600,000. By 1999, it was said Howard Holding’s “activities are now principally concentrated in commercial investment property in the UK.”

In 2000, plans for a secondary listing in Dublin were cancelled and not long after, the decision was made to take Howard Holdings back into private ownership.

Howard Holdings was not alone to make this move. The high-profile Irish property companies, Dunloe House and Green Property have removed themselves from the Irish stock exchange as has Sherry FitzGerald. Privatisation allows a firm’s affairs to be conducted away from the scrutiny of the markets while removing whatever threat might exist of a hostile takeover.

Mr Coughlan and Mr Gormley have certainly not ignored the Irish market in recent years. The construction of multistorey carparks, driven by tax breaks, has proved particularly lucrative.

Apart from extensive construction related tax reliefs, double rent relief was available in respect of operational costs.

Howard Holdings built three carparks in Cork City. Such edifices do not contribute much to the city skyline, but they soak up vehicles in what is a highly- constrained urban space.

Two years ago, Howard Holdings found itself in the spotlight over a deal which its carpark operator subsidiary, Winston Properties, entered into with Beaumont Hospital, in north Dublin.

The arrangement was subject to a value-for-money audit carried out by the comptroller and auditor general John Purcell.

The project involved a complex public private partnership where the developer, using a partnership of investors, financed the construction of the carpark at the hospital in return for the grant of a lease to operate it.

The carpark was to revert to the hospital after 13 years. In theory, both sides of the deal should have been quids-in as a result of this tax financed deal. In practice, only €120,000 in rent was received by the hospital from the operating company as against the €1.8 million envisaged under the lease terms.

Mr Purcell told the Public Accounts Committee that this amounted to a “mismanagement of the terms of the lease” on the part of the hospital. He estimated the Irish taxpayer was “between €8.9m and €13m worse off as a result of the deal.”

Whatever the merits of such transactions, they have helped drive the company forward.

Rental income from the carparks exceeds €3m a year.

In recent years, Howard Holdings has been moving upmarket while expanding its turnover.

Major projects are underway in Majorca and Capetown with three major developments due to begin in Krakow, Poland.

Closer to home, the firm has been given the go-ahead to develop 45,000sq ft of IT and business office space in Cork city centre. The company is also involved in a large business park joint venture with Fingal County Council and it has submitted plans for a 25-storey residential building in Croydon, London.

Arguably the jewel in Howard’s crown, Mandela Rhodes Place is a €63m project aiming to transform Capetown’s historic city centre.

Eastern Europe is the next focal point for expansion. Three residential projects are planned in Krakow. A staggering €300m plus is being pumped into a new golf complex in Majorca.

Howard Holdings remains active in Ireland. The Balbriggan Business Park will eventually run to one million square feet. And a hotel is being built in Limerick. The company recently acquired the Wilton Shopping Centre for €126m in the largest deal of its kind, last year, in Ireland.

Mr Coughlan himself has returned close to his roots after 25 years. His four children are grown up and living in Britain. A lavish new home awaits Greg and his wife in their adopted home town of Kinsale.