Business Irish

Sunday 25 August 2019

From Glenamaddy to Uganda: How the Comer brothers built up their property empire

Billionaire builders Luke and Brian Comer may yet add more billions to their fortune. It's all down to 'bottle,' timing and hard work, they tell John Reynolds

Comer brothers Brian and Luke
Comer brothers Brian and Luke

John Reynolds

Galway billionaire builders Brian and Luke Comer have plenty of anecdotes to tell during our interview in their north London headquarters. It is a modest office with photos of horses on the walls, in the grounds of Princess Park Manor, a large Victorian manor house, surrounded by parkland, that they have restored.

There is the €18m they lost in 2008 betting on the Dollar Index and the price of oil.

"We made €12m but then lost €30m a few weeks later, so we gave it up after that. It was a valuable lesson: there's no such thing as easy money."

Over the years on the path to their billions, "we would have lost €20m or €30m on many deals. For every good one you do, there will be one or more bad ones."

Then again, some land they own in Germany is now worth at least 30 times what they paid for it and two vast north London sites that they have amassed could be worth anywhere between €6bn and €12bn if rezoned for development, they claim.

At home, they are planning a huge business park on the 210-acre Metro Park site near Dublin Airport.

They recount how former heavyweight champion boxer Lennox Lewis introduced them to Ugandan President Museveni. They are now building a huge suburb in its capital, Kampala.

Margaret Thatcher features in their stories too. She was their local MP in the 1980s and they forged something of a friendship through constituency dinners.

"She was a fine woman. Obviously, from an Irish point of view she was very tough, but in our conversations we got some insight into why she dealt with some things the way she did," says Luke.

They also plan to build up a world-class racehorse-breeding operation in Ireland, which already extends to around 200 thoroughbreds in Meath and Kildare.

"I have a system and a plan in mind, but it'll remain a secret. We already have a serious breeding operation and we'd like to add to it and make money out of it, producing horses worth millions or maybe tens of millions.

"We won't be found wanting; I'd hope we could rival anyone, though I'm not sure we'd be better than Coolmore."

Now, with an extension added and converted to swanky apartments and an on-site gym, if both the Manor's older and more modern walls could talk, they would undoubtedly have plenty of stories to tell as well.

Previous residents at various times have included the One Direction lads and Girls Aloud - Ashley and Cheryl Cole rented a flat here before they were married.

Between 1851 and 1993, however, it was one of the city's main psychiatric hospitals, known as Colney Hatch Lunatic Asylum.

A devastating fire in which 51 patients died in 1903 is also part of the building's history. There is even a tunnel to the nearby train station in case any royals or well-known politicians needed to be discreetly admitted as patients.

As two of the very few Irish property developers who didn't end up in Nama and lumber the country with billions of euro in debt, the brothers from Glenamaddy, who left school in their early teens to become apprentice plasterers, have hoovered up huge swathes of properties in Dublin, Cork and Galway at massive discounts over the past five years.

Our Rich List earlier this year estimated their vast portfolio as worth €2.87bn. In recent years, they have put the company on a very solid footing by reducing its debt considerably, Luke says.

"We've sold enough to leave the company with completely manageable debt. It's no more than 10pc of the value of the properties. That figure of what we're worth is in the ballpark," he reveals, declining to go into more precise detail.

Their Irish properties include the former Veterinary College site in Ballsbridge, which they picked up for €22.5m last year; it had changed hands for €171.5m at the height of the boom.

They did even better with Kilternan Hotel and Country Club, buying the 206-bed hotel, golf course and facilities for just €7m when it had cost €171.5m to build. There are other sites, hotels and apartment blocks, as well as stately piles Palmerston House and Hollywood director John Huston's former mansion Courtown Demesne.

In London and southern England, there are more office and apartment blocks, more mansions restored and converted to apartments, similar properties in Germany and a swathe of shopping centres. A riverside site in Berlin that they bought for no more than €10m is planned to feature a €2bn development.

This vast empire is a long way from their modest Glenamaddy background. Their father had a small farm-contracting business, specialising in land reclamation.

"Our parents never let us forget that real starvation was never very far away. It was work or starve in those days. We lived on a smallish farm.

"I suppose they had tough times, but we might not have been aware of it. We always had plenty to eat, I think," Brian, who runs their UK business, recalls.

Describing the secret of their success, Luke draws a comparison to the Galway hurler Joe Canning.

"Like Joe in the recent final against Kilkenny, if you're always ready, that's as much as you can plan for. You take the openings when you get them and they don't come too often. Try to be in the right place at the right time.

"It's the exact same ingredient that makes you as breaks you - and that's bottle. Then it's a question of timing; when you apply it.

"We would have always planned to get as big as we could in property development. It was a case of trying hard, being close to the goal and ready to score."

Buying at rock-bottom prices lower than the cost of building - up to 96pc less in some aforementioned Irish cases - has also underpinned their success. "We both enjoyed and still enjoy working. It's a big help when you are working hard. You always enjoy success. We get a good buzz from what we do. I suppose we are good at managing people, but you make mistakes every day.

"We are no different to anyone else in that respect. It begins to come naturally with time. You do your best, but you get some people wrong sometimes and you learn as you go along," adds Brian, the less outspoken of the two.

"It's always good to see a building that looks good rising up, creating something from nothing. There will be some fine developments that we've created around the world in the future, no matter what our future is. They'll be around for the next couple of hundred years," adds Luke, who lives in Monaco and runs their German business.

"We never rush a development. With this Manor, a rival builder might have done it in one year and maybe sold each apartment for £200,000, whereas we did it over about six years and sold them for up to £700,000. Timing is important."

Often working 18-hour days as plasterers in Ireland working for - and learning from - builders such as Ken Rohan and Sheelin Homes, after they just broke even on a development in Kinsealy in north Dublin in the 1980s, they started out doing joint ventures in England, before branching out on their own.

They made their first big money - about £20m - on Ealing Hospital, bought just before the market collapsed in 1988.

"We did everything we could just to survive for four years, buying and selling land, trading hundreds of sites, a few at a time, which generated a lot of cash. We had a good few million borrowed at the time and UK interest rates were at 18pc."

When you're on the wrong side of the banks, Luke likens them to a character from the 1980s horror film Nightmare On Elm Street.

"Banks dictated to us in other recessions, but with our debt on a more solid footing, it's highly unlikely any bank would ever be able to force us to do something again. If you couldn't pay them back at any time, they were like Freddie Kreuger.

"They'd lash out and slash in all kinds of grim ways. I prefer not to be on the wrong side of them. Any bank manager will always let you down when you need him most, always."

What do they make of the respective markets they operate in?

"Germany has experienced a huge upturn. After a rise like that, something has to give way and go down. The Irish market has risen too quickly. In some cases, we were outbid by double over the past year."

In booming London, "our sites are mostly in good boroughs, many still within reach of the average Londoner, so we're not doing too bad," says Brian.

Dublin's property market needs to be cooled off with high-rise development, Luke argues.

"It's crazy how planners outlawed them to a large degree. It's what makes a modern city. Dublin needs to be contained; not sprawled out from Drogheda to Wexford; smaller, with bigger green spaces.

"Where you have riverside space, waterfronts and overlook parks, what's wrong with having high-rise buildings?"

What do they make of how Nama has been run, particularly in light of vulture funds having already flipped several ex-Nama properties for a profit?

"I'm sure when you look back, there will be many stupid things they did. Looking at how the market has improved, if they'd held on to everything until now, that would have been the right thing, but that was a difficult call to make, say between 2009 and 2011. Everything is easy with hindsight and they've arguably been as clever as they could. The Government needed money back, the Troika were on their back and they had to keep the actual Nama operation going," Luke opines.

They both appreciate the injustice of the crash in Ireland.

"Everybody should have got out of it a little bit better off and able to buy an affordable home. If interest rates had been 3pc or 4pc, rather than practically zero after central banks' money-printing, less money would have flooded into the investment funds that drove prices up too fast.

"Banks would have had money to lend and prices would have risen more steadily and been more affordable. After all, out of the bad should come the good. It's why the average person in Ireland, Britain and much of Europe is angry," he argues.

Have they had approaches about selling the company or would they consider floating it on the stock market?

"It's not something we'd like to do. Answering to people on a daily basis wouldn't be our thing," says Brian.

While both are still in their fifties and they have daughters and other family members working in the business, what will happen to the Comer Group in the future?

"We hope to still be around in the future to hand it over to our children, I suppose. Its future is fairly solid and reasonably good. Before, we used to take huge risks, now we're not taking them as much," Luke concludes.

'I'd probably go back to driving a digger'

My greatest indulgence is...

Brian: "Golf and a good bottle of red wine." (He lives beside a golf course.)

Luke: "Horses, for better or worse!" (He enjoys working on the stud farms, but also owns a BMW and two Mercedes. They're thinking of buying a four-seater helicopter - but still fly Ryanair.)

My favourite type of architecture is...

Brian: "Georgian and Victorian."

Luke: "Clean cut-glass buildings, in a timeless design."

If we weren't in property development...

Brian and Luke: "We'd still be plastering."

The hardest lesson that I've learned in business so far is...

Brian: "When you really need money, and your bank is demanding repayment in full, you don't have a friend in the world."

Luke: "We thought we had friends who had leant on us heavily. We didn't have a single one."

If we lost it all and had to start again...

Brian: "I'd like to think I'd be able to go back to plastering."

Luke: "I'd probably go back to driving a digger, as I used to love doing that... listening to the radio with my flask and sandwiches."

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