Corporate Plan 2017-2021 - Belfast Harbour
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Corporate Plan 2017-2021
Contents
2 Chairman’s Welcome 4 3
Purpose, Values & Vision 6
Investment Plans 8
Contents
Economic Enabler 10
Business Model 11
Business Environment 12
Business Goals 16
Corporate Responsibility 22
Corporate Plan 2017-2021
Chairman’s
Welcome
4 This document All of this investment will be funded has been perhaps best typified by 5
provides detail on from our business’s retained profits, the development of City Quays, a
facilitated by our Trust Port status 20-acre site on waterfront land no
Belfast Harbour’s
Chairman’s Summary
which requires us to reinvest every longer suitable for marine uses.
2017-21 Corporate penny of our net earnings into
Plan which involves developing Belfast Harbour for the The City Quays office-led project
a record £581 million benefit of Port users and tenants is leading the way in ensuring that
and the wider regional economy. Belfast has sufficient Grade A office
potential investment
space to meet the demands of both
in developing our Belfast Harbour is one of Northern overseas and home-grown investors.
Port infrastructure Ireland’s largest infrastructure The first office development was
and estate. developers. With 23m tonnes of fully let to blue chip clients within
cargo (70% of all Northern Ireland’s ten months of completion and over
seaborne trade), 1.5 million ferry the coming years will be joined by
passengers and over 150,000 new office developments, a multi-
cruise ship visitors passing through storey car park and a four-star hotel.
the Port each year and our 700
tenants employing over 23,000 Upon completion City Quays is
people it’s clear that we are a key expected to support 15,000 jobs,
driver of the local economy. and during development will support
more than 2000 construction related
Much of our planned investment will jobs. City Quays is a direct and
be committed to further enhancing tangible example of the benefits of
Belfast Harbour’s services to ensure Belfast Harbour’s investment plans
that they continue to match – benefits that will be replicated by
technological changes within the further projects in Titanic Quarter,
wider port industry. For those purposes the Belfast Harbour Studios and
we are committed to improving our new marine infrastructure.
infrastructure to meet the trend for
ever larger vessels , providing new We are committed to further
cranes and supporting quayside developing Belfast Harbour by
operations whilst also developing new progressing significant, long-term
warehousing and logistics facilities. infrastructure projects. This will
not only help support our business
Belfast Harbour is a multi-faceted growth and but also ensure that
business with a strong track-record that our customers and the wider
of facilitating urban regeneration economy continue to benefit from
projects that have benefitted the our ambitious investment plans.
wider economy. In recent years
implementation of regeneration
Corporate Plan 2017-2021
Purpose,Values 2017-2021
& Vision Plans
6 PURPOSE Plan Summary Live Projects 7
To operate and maintain the Port, develop Port
capacity and develop the Property Business, • Belfast Harbour performs in line with its constitutional mandate • £3m investment in new cranes
Purpose, Values & Vision
so supporting Port users and tenants and of maintaining, operating and improving the business which completes a £10m spend
the development of the regional economy. • £1.5m cargo handling
• Belfast Harbour recognises the positive economic impacts that
equipment upgrade
accrue from our activities and carries that ethos into business
VALUES and operational decisions • £1m purchase of a new pilot boat
Belfast Harbour recognises that the values
• Belfast Harbour capital expenditure plan will be entirely funded • £35m VT3 re-facilitation
held by the organisation guide how we and upgrade
behave and the decision making process at from retained earnings seeking to maximise outcomes for the Port
and the regional economy • Stena facility upgrade -
all levels. The values stated below, therefore,
potentially £22m
are employed to validate behaviours and • It is vital that the business has sufficient cash reserves to fund
• £3m Stormont Wharf refurbishment
decisions throughout the business. its capital spend commitments in support of the regional economy
• £10m investment in warehousing
• The majority of Belfast Harbour’s capital expenditure programme
• Active in growing commercial
• Service to Society – make a difference is made up of major port infrastructure and construction projects
property portfolio
to our local and regional communities which are multi-year projects whose delivery is impacted by factors
such as planning, environmental approvals etc. • £16m cruise berth awaiting
• Environmental Sustainability – planning approval
seek to reduce the impact we have • It is vital that the business has sufficient cash reserves to fund its
• £46m City Quays 3
on our natural environment forward capital spend commitments which are large multi-year
16 storey office block
investments
• People – develop the business • Development of £2m
• Work will be undertaken to progress ‘Horizon Projects’ – which City Quays Plaza
environment to make Belfast
are at the conceptual design stage or are the subject of looking
Harbour a rewarding place to work • City Quays 2 completion - £20m
forwards in the medium to long term including City Quays and
Titanic Quarter • Continuation of the AC by
• Safety – provide a safe environment
Marriott at City Quays hotel build
for everyone using Belfast Harbour
• Delivery of the £20m
• Respect/equality – treat everyone film studio project
as a valued customer
Capital Investment Summary
• £18m multi- storey car park
2017 2018 2019 2020 2021+ to serve City Quays
• Teamwork – co-operate to
• City Quays 4 design and planning
achieve the best outcomes Investment £60m £99m £102m £112m £208m
• Integrity – mean what we say
and say what we mean
VISION
Our Vision is to offer leading edge facilities
and services to our Port and Property
customers and to contribute significantly to the
economic development of Northern Ireland.
Corporate Plan 2017-2021
Belfast Harbour Belfast Harbour
Economic Enabler Business Model
8 The scale of Belfast First and foremost Belfast Harbour In the last 15 years Belfast Harbour REVENUE STREAMS 9
Harbour’s operations is the region’s principal maritime has delivered over 10m square
gateway, handling over 23m tonnes feet of built space. This has ––Ship Goods
make it a key player
Economic Enabler
of cargo annually. With a value in included commercial office, R&D, ––Cranes
in Northern Ireland’s excess of £30bn these goods represent manufacturing, residential, leisure
Shipping Income
––Pilotage
regional economy. 70% of Northern Ireland’s seaborne and retail projects City Quays alone ––Terminal Rentals
trade. Belfast Harbour is also the will regenerate 20-acres of city
only port in Northern Ireland with centre waterfront with two million ––Port Operational Land
facilities to handle all of the main square feet of space. Representing Port Land Income ––Port Operational Facility
cargo types, including Bulk, Roll-On / a £250m investment, it will include ––Logistics Warehousing
Roll-Off, Containers and Passengers. 800,000 square feet of Grade A
office accommodation together with
a four-star hotel, multi-storey car ––Land Rentals
It is no exaggeration to say that
virtually every aspect of commercial park, residential and retail space. ––Occupational Rentals
life in Northern Ireland is impacted Property Income ––Titanic Quarter
directly and indirectly by Belfast Belfast Harbour also facilitates ––City Quays
Harbour’s operations. From food major tourism and visitor projects ––Sydenham Business Park
to home heating oil, animal feed including Titanic Belfast, SS Nomadic,
and consumer goods imports, the Titanic Exhibition Centre and ––Film Studios
every business sector and facet of Northern Ireland’s burgeoning Operating Company Income ––Hotel
society relies and benefits from cruise sector which currently ––Multi-storey Car Park
the trade, freight and people attracts 150,000 visitors annually.
passing through the Harbour.
Estimates suggest that over 30%
of Northern Ireland’s GDP is
supported by Belfast Harbour, while
almost 30% of local employment
is similarly under-pinned.
Corporate Plan 2017-2021
Business
Environment
Overview
10 BREXIT are closer to 1.8%. Further, whilst severe and thus the risk of a sudden EUROZONE 11
The UK vote to leave the European there are positive tailwinds for the downturn in the Chinese economy According to the latest data, excluding
Union has the potential to impact economy given the anticipated cut remains for Belfast Harbour. Other RoI, in value terms, Northern Ireland
many areas in our Compliance incorporation tax and weaker sterling emerging markets such as Brazil and trade with the Eurozone represents
Environment as well as the obvious assisting exporters, these positives are Russia have their own difficulties 20% of exports and 29% of imports
threats and opportunities it poses countered by the twin effects of lower mainly as a result of over-reliance and is thus a key trading partner for
to our trade. Until the moment the corporation tax levels across the whole on oil and the commodities sector Northern Ireland. The ECB is forecasting
UK leaves the EU, it will remain a of the UK (thereby eliminating much which remain weak overall. that GDP growth will be 1.8% per
full Member State of the Union and of NI’s advantage in that area) and the annum in 2017 and 1.7% in 2018.
continue to enjoy all of the rights potential negative impacts of Brexit. Indications are that the world
of membership, however it will also economy will grow by 3.4% in The relative strength of the Euro vs
continue to be bound by all Treaty With the proportion of Northern 2017, but with risks arising from, Sterling is likely to assist Northern
obligations, legislation and policy. Ireland’s trade with the EU, higher EU Bank liquidity issues and, Ireland exports into the Eurozone
than any other part of the UK, and Chinese credit risks (IMF). in the short term however it is
PORT CONTEXT & OVERVIEW as the only part of the UK with clear that this is also going to
The success of Belfast Harbour is a land border with the EU, the UNITED STATES feed through into higher costs for
linked to the performance of the impact of Brexit is likely to be more According to the latest data, in value producers in the UK importing raw
economies it serves and trades with. acutely felt in Northern Ireland terms, Northern Ireland’s trade with materials from the Eurozone.
Thus as we consider the prospects than any other part of the UK. the US represents 22% of all exports
for port traffic, we must examine and 8% of imports, and as such the US
the health of the Northern Ireland As a result, it is forecast that the is a key trading partner for Northern
economy and that of our major Northern Ireland economy will grow Ireland as its second largest export
trading partners in the Republic of by only 0.3% in GVA terms in 2017 partner. The US economy continues to
Ireland and the UK mainland, and (PwC NI Economic Outlook) thus be driven along by strong consumer
also consider the wider context of the narrowly avoiding a recession. By the spending and overall unemployment
global economy, not least the likely end of 2019, Northern Ireland’s total levels sit at less than 5%.
impact of Britain’s forthcoming exit GVA is forecast to still be 0.5% lower
from the EU. All of our assumptions than its previous peak year of 2007. In addition to the timing risks
below will be dependent on the associated with interest rate rises,
forthcoming exit negotiations. GLOBAL ECONOMY the success or otherwise of the initial
Whilst China remains a key engine major economic and trade policy
NORTHERN IRELAND ECONOMY of global economic growth, decisions of the Trump presidency
Northern Ireland remains the poorest commentators are increasingly will serve as the key risks to US
performing economic region in the UK concerned with the debt fuelled economic performance during 2017.
with 2016 GVA growth expected to nature of that growth and the
be 1.2% (PwC NI Economic Outlook) potential hard landing should the The Plan assumes that the US economy
when compared with the rest of the credit bubble burst. The impact will grow by 2.5% in 2017 subject
UK where expected growth rates on the global economy, would be to the aforementioned risk factors.
Corporate Plan 2017-2021
Business
Environment
Overview
Continued
UK ECONOMY REPUBLIC OF IRELAND (ROI) 13
Manufacturing external sales to ECONOMY
GB represent over 60% of total The RoI is Northern Ireland’s
Northern Ireland manufacturing largest export trading partner and
total external sales in value terms. second most important market
to the UK, representing 32% of
In the light of the UK’s vote to leave exports and 27% of imports.
the EU, it is clear that the above
GDP growth figures and more The Plan assumes that the ROI
pertinently the growth prospects in economy will grow by 3.5% in
later years will be impacted by the 2017 and continue to outpace other
outcome of Brexit negotiations. Eurozone economies, however it
will likely have the largest potential
With the recent decline in the adverse impact from Brexit negotiation
value of Sterling, inflation has outcomes of any EU member state.
risen during 2017 well beyond
the Government’s 2% target. INVESTMENT SENTIMENT
Business investment remains a vital
It is likely that interest rates will increase component of economic growth.
at intervals during the coming years.
Composition of UK level GDP on the
The Plan assumes that the UK expenditure side shows household
economy will slow in 2017 with consumption at 65%, government
forecasted GDP growth of 1.7% expenditure at 20% and gross
as the UK economy finds its way fixed capital formation (investment)
through Brexit negotiations with the at 17%. Exports of goods and
risk of adverse impact of increased services account for 28 % of GDP
inflation and consequent interest while imports account for 30%,
rate rises in 2017 and beyond. subtracting 2 percent from GDP.
Investment sentiment is therefore
a key factor in economic growth.
Latest statistics from ONS show that
investment in the UK (in nominal
terms) has recovered to pre-crash
levels, however, media commentary
suggests that businesses are currently
acting more cautiously and deferring
investment until after the outcome
of Brexit negotiations is known.
Corporate Plan 2017-2021
Business Drivers
Port Activity
Demand Drivers
14 ROLL-ON ROLL-OFF (RORO) extend. Modernisation of the terminal Coal 15
Stena is the RoRo sector’s singular will be progressed in the near future. Coal demand is driven by domestic
customer serving three key routes to coal consumption, power
Loch Ryan, Liverpool and Heysham. DRY BULK generation at Kilroot and value
Each of these routes has its own The Dry Bulk sector has three adding grading for export.
dedicated terminal operated by Stena. significant trades; grain and animal
There are plans to upgrade one of feeds (GAF), coal and aggregates. The supply of coal to the power
the terminals (VT2) to cater for the station at Kilroot and its continuance
latest ship and terminal technologies. Grain is linked to the economics of coal as
The two key GAF customers are Barnett a fuel and government consenting
Belfast Harbour believes that RoRo and Cefetra and future volumes will for its use. Current indications are
offers modest growth opportunities be dependent on the post Brexit future that (not withstanding shifts in
over the medium term. of agri business in Northern Ireland. the economics) the power station
can burn coal ‘unencumbered’ by
LOAD-ON LOAD-OFF (LOLO) The grain facilities occupying a environmental emissions regulations
The LoLo terminal contract with Irish section of Stormont Wharf are until at least 2020 and that this may
Continental Group (ICG) is in place subject to an investment project to be extended in the post Brexit world.
for a further 3 years with options to extend the useful life of the quay.
Corporate Plan 2017-2021
Business Drivers
Port Activity
Demand Drivers
Continued
16 The export grading operation is RENEWABLES CRUISE 17
underpinned by the investments BHC’s renewables business is Cruise ship business is a relatively low
made by LCC and Belfast Harbour dominated by the DONG lease of D1. margin activity for Belfast Harbour.
to facilitate such export trade. Nevertheless, we have been successful
DONG see D1 as key to its investment in growing the cruise business and
Aggregates in the Irish Sea and it is project certainty Belfast is now an attractive and
Belfast Harbour has a key beyond the current schedule that is established destination. To support this
strategic partner in Conexpo the key factor in ongoing success. activity we have been investigating the
whose trade is driven by UK and Much will depend on the government’s creation of a dedicated cruise berth.
European road building contracts approach to renewables – offshore is
including the reconstruction of the favoured way forward at present The volume of calls (88 per annum)
26km of the road network near and is likely to continue to be so, is now leading to asset conflicts
Limburg in southern Holland. especially as the latest technologies with our dry bulk business and an
bring down the costs of subvention Initial Investment decision has been
LIQUID BULK below that of nuclear power. made to progress a cruise facility
Belfast Harbour leases three sites (inclusive of Visitor Reception) at
which house liquid bulk storage PORT PROPERTY TENANTS D3 – current estimate £16m.
facilities operated by Puma Energy, The balance of Port Property income
DCC Energy and Nustar. These facilities splits 90/10% between tenured
compete with a relatively new market occupation and more temporary
entrant based in Londonderry. arrangements. Such occupiers are
using facilities to support cargoes
Other than impacts on energy that are moving through the Port.
demand deriving from GDP, there are
no expected Brexit consequences. In the distribution warehouse
sector, Belfast Harbour believes
BREAK BULK demand is strong due to increased
The larger elements of Break Bulk internet shopping and home
activity include paper, steel and delivery and a speculative build
wind turbines. These continue to project is likely to be accelerated.
be a significant part of the business
and Belfast Harbour will continue to LAND RECLAMATION (A5)
facilitate and explore opportunities This project continues to progress
with our key partners in these fields. with closure of remaining issues
relating to planning, mussel farmers
and the Operating Expenditure
required prior to project approval.
Corporate Plan 2017-2021
Business Drivers
Property
Demand Drivers
18 COMMERCIAL OFFICE ownership of development sites and HOTEL It has been widely reported that The industry is supported by a very 19
The office market continues to having already enabled shorter term The hotel sector within Northern Belfast and the immediate region attractive UK tax credit system
report a shortfall in the provision delivery of physical buildings with the Ireland continues to demonstrate currently suffers from an undersupply whereby the film production
of Grade ‘A’ office space, against a securing of Outline Planning approval growth at a rate in line with the of hotel rooms. Belfast Harbour’s company, whilst undertaking
backdrop of heightening levels of for the overall City Quays Masterplan. majority of UK regional cities with hospitality advisers estimate that production within the UK, can claim
market activity from both growing higher than average room occupancy the undersupply is around 600 a cash rebate of up to 25% of
indigenous and new market entrant Competing developers are now levels exceeding 80%. From our bedrooms supported by increasing qualifying expenditure, applicable
Foreign Direct Investors (FDIs), as entering the market e.g. McAleer & own research, Belfast hotels (across demand supplemented by the to film and television production.
well as FDIs growing from current Rushe with their Bedford Square office all ratings) can quite often be fully growing ‘meetings, conference and This together with the lower cost
serviced office accommodation. scheme, Kilmona Holdings lodging booked both midweek and weekends. exhibitions’ sector. A number of of production in NI, a growing
Planning Applications opposite Lanyon The average room rate, however, has hotel projects have been announced local media skills base, convenient
Competing office developments to and Chichester Street for 300,000 lagged somewhat behind occupancy as proposed, lodged to Planning connections to London and the
Belfast Harbour’s City Quays scheme square feet of Grade ‘A’ offices and levels, with commentators noting or are under construction, which high quality IT infrastructure and
have thus far been small in number. complimentary retail and the already a general sector post-recession will provide competing product to connectivity creates an excellent
It is clear, given the letting profile approved Bankmore Square office. nervousness and hoteliers not wanting the City Quays hotel albeit, thus opportunity for global and
and timings achieved in City Quays 1 to negatively impact the current far, not directly in the 4* sector. indigenous production houses
and indeed the level of pre-lets and Other refurbishment schemes of recovery in terms of occupancy. to take space in Belfast.
further interest in City Quays 2, that old stock office space are currently It, however, remains BHC’s opinion
having built product either completed underway which will also create that the AC by Marriott hotel offer The recent announcement that
or substantially under construction, competing product during 2017 will provide a market differentiating production of the Game of Thrones
remains a key factor in the current which, although not of Grade commercial proposition in its own series will end will bring both the
market to securing the interest of ‘A’ standard, may well appeal to right and indeed support the TQ studios and the Paint Hall onto
quality occupational tenants. some of the target tenant sectors overall City Quays development the market as direct competition.
such as the creative industries. in terms of mix of uses which Other ad hoc converted warehouses
The issues raised by prospective create and sustain footfall. such as Britvic and those in
occupiers and their advisors with Further opportunities exist within Banbridge will also, to a lesser
regards other potential competing the Harbour Estate, beyond the City FILM & MEDIA extent, provide competitive space.
developments primarily surrounds Quays scheme, to develop other Northern Ireland has over the last
uncertainty of delivery due to Planning office space. Such opportunities number of years established itself on a It does however remain the opinion
Approval timescales and the lack include working collaboratively with global stage as a first class location for of Belfast Harbour and NI Screen
of availability and/or cost of project Titanic Quarter Limited on potentially film and television series production. that the provision of our new-build,
finance. Belfast Harbour’s clear large projects such as the Olympic The long-running Game of Thrones bespoke, class-leading specification
differentiator as a developer remains House office and with Catalyst Inc. series together with film production studios supported by workshops and
its ability to fund and deliver the type in developing suitably sized smaller and high-end television series creates offices (which are lacking within the
of space required by the market on scale office as growth space and a business opportunity to develop competitor offers) within an area
a speculative basis. This has been so support their knowledge based and operate high quality bespoke film providing such an extensive backlot
achieved as a consequence of our science and technology objectives. studios together with the requisite will represent a market differentiator.
ability to self-finance development supporting infrastructure of workshops,
from capital reserves, unencumbered office space and on site car parking.
Corporate Plan 2017-2021Business Goals
Business Goals
Port Goals
22 Belfast Harbour’s This translates into the following Port Goals: 23
mandate includes:
• Deliver marine capacity to support the needs of the economy by:
‘Maintaining, - Investing to deliver sustainable financial returns, and
operating and - Operating the Port profitably in order to fund future investment
developing the Port.’ and growth needs
• Deliver ‘Leading Edge’ facilities and services to Port Customers and
Port Service Providers
Proposed Port
Investment 2017-22
Belfast Harbour has ambitious plans to further grow
market share and improve the Port to ensure we
service our customers and the local economy in the
most efficient way. This investment will include the
purchase of new equipment, upgrading of facilities,
infrastructure maintenance and improvements.
Corporate Plan 2017-2021Business Goals Business Goals
Property Goals Corporate Goals
24 Belfast Harbour’s This translates into the following 25
mandate includes: Property Goals: Proposed Property • Sustain and develop
an appropriate Constitutional
Investment 2017-22 model for the business
“Developing the • Manage and develop Belfast • Maintain the highest standards
Property Business Harbour’s real estate so as of Corporate Governance
to optimise overall financial Belfast Harbour continues consistent with the
in order to performance and generate requirements of a Trust Port
to enhance its property
underpin funding sustainable economic activity by: • Deliver the highest
for development business by further standards of Health, Safety
- Managing the Property
of the business and Operating Businesses developing the Harbour and Environmental
management and practice
Portfolio profitably
and to facilitate Estate in City Quays, • Deliver ‘Best in Class’ people
economic growth.” - Developing and marketing Sydenham Business Park, processes and practices
property projects that deliver • Communicate effectively
sustainable financial returns Titanic Quarter and
with our Stakeholders and
Odyssey Complex. be a leading corporate citizen
During the next five years Belfast
Harbour will continue the City Quays
development with the completion of
two further office developments, a
multi-storey car park and the AC by
Marriott Hotel and the opening of the
Jean Christophe Novelli @ City Quays
restaurant. The next five years will also
see joint ventures with Titanic Quarter
Limited, the first project expected
to be the Olympic House office.
In 2017 Belfast Harbour will open
its first operating businesses in the
form of Belfast Harbour studios
which is attracting strong interest.
Further operating businesses will
come on line in 2018 and 2019
including a hotel, restaurant, multi-
storey car park creating a new
revenue stream to support our
planned development activity.
Corporate Plan 2017-2021Corporate
Responsibility
26 Corporate We group our CR activities under CREATIVE CULTURE 27
Responsibility (CR) four key pillars of Young People, Aim
the Environment, Community and Support local creative organisations
is part of our
Creative Culture with the theme to contribute to developing Northern
cultural DNA – our of sustainability and regeneration Ireland as an attractive destination.
commitment to underpinning our strategy.
investing in the YOUNG PEOPLE
COMMUNITY Aim
sustainable growth
Aim Contribute to assisting unemployed
of the region Use our skills and resource to and underemployed young people
complements our contribute to tackling social in Northern Ireland into work.
CR activity. issues key to the development
of local communities. We will also continue to permit
use of the Harbour Office facilities
ENVIRONMENT to stage events for external
Aim associations, charities and
Support the development of social economy groups in line
environmentally sustainable with our existing policy.
business initiatives for current
and future generations.
Corporate Plan 2017-2021Consultation
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