Thursday 19 September 2019

'We are coming up to a bubble, and I would be afraid that if the bubble comes before we build enough houses we will be rightly stuck'

In person: Hugh Wallace, CEO of Douglas Wallace

Hugh Wallace is happy with scale and size of Douglas Wallace once more, and maintains that it is ‘challenging but fun’
Hugh Wallace is happy with scale and size of Douglas Wallace once more, and maintains that it is ‘challenging but fun’
Ellie Donnelly

Ellie Donnelly

Irish 'Starchitect' Hugh Wallace is a household name now, regaling the nation with his opinions on RTÉ's 'Home of the Year' where his trained eye helps to choose a winner out of 21 shortlisted unique Irish homes.

More recently he has also presented 'The Great House Revival' - looking at bigger piles.

His day job though, is as chief executive at Douglas Wallace, a company that describes itself as 'brand environment consultants'.

The firm's roots are in architecture and commercial interiors - a sector that has seen wild swings in fortunes over the past two decades. Douglas Wallace went through its own major crisis - in fact the firm barely pulled through the crash.

Wallace, a plummy-voiced Dublin native, has worked through it all. He's been on the go since before he'd even graduated.

"I met Alan Douglas when I was in college on Bolton Street and, by the time I graduated, Douglas Wallace had been set up. Our first project was the Harbour Hotel in Rosslare," Mr Wallace says.

Alan Douglas is retired now, and living in Nice, but Wallace remains in the business and in an industry he's seen transformed at least twice during his working life.

"When I came out of college in the 1980s there was nothing - no cranes. I went into interior design in the retail sector and A-wear was one of our first clients."

"Then we got into Brown Thomas and really our business was one of creativity. It was a mad, marvellous period because we were in this sunny niche, we were not stepping on anyone's toes. It was a very different time, while it was the 1980s so there was a lot of loose money floating around," adds the member of the Royal Institute of Architects in Ireland.

By the end of the decade Douglas Wallace had a team of 20 employees.

"Then the naughty '90s came and interior design became a profession. We did all the BTs around the country, and we started working with hairdressing chain Peter Mark in mid-'80s - we are still working with him."

Corporate projects were not just confined to main street shops, with the business also working with a number of banks including National Irish Bank and Permanent TSB.

"At one time we did a bank a month, and we got a reputation for being commercial and doing great design," Mr Wallace says.

By the time the millennium came around, Ireland and the company "had got into sixth gear".

"We had 160 staff, it was year-on-year growth. At that point the company had become a company nearly running a company, but the work we were doing was amazing."

However the recession hit hard and, by his own admission, the company "fell off the edge". At the same time Hugh Wallace had his own personal demons - he's spoken before about his own battles with alcohol and depression.

In May 2009 Douglas Wallace collapsed into liquidation.

However Wallace, and his fellow investors, were able to buy the business back.

Goodwill that the company had built up stood to it and some clients, such as Peter Mark and grocery giant Dunnes Stores, stuck with the firm.

"We started off with four people again," Mr Wallace admits. "The vast majority of our clients were gone."

The reborn company made a key financial decision. It would have no bank borrowings.

"You can't spend what you don't have," he says.

With the economy on the up, business is booming again. Recent high-profile developments have included the Cliff House Hotel, the South Court Hotel in Limerick, and Hotel Indigo in London.

Wallace hasn't been tempted back into debt-funded expansion, though. The company has no borrowings from financial institutions. "There is no debt against our profit."

"We now have 20 employees again. We are happy it's a scale and size we like. We can engage directly with clients, we, the directors, are on site, we are the designers and it is fun. It is challenging but it is fun."

"And I think there is a respect for the business that maybe was not there before," he adds.

"The great thing about our business is that it is always changing and evolving - we work with clients to assist them with this change," he says.

Right now, Douglas Wallace is also working on the Tivoli Quarter aparthotel and mixed-use development in the Liberties area of Dublin. The scheme includes a 260-bed aparthotel, three restaurants and a retail area.

And it is not just corporate clients that the Dublin-based firm is involved with. The company also works with private individuals, helping people with the design and restoration of their homes.

Wallace is forthright on the issues facing the Irish housing marketplace.

"I think we have a number of fundamental issues that we don't discuss in the country," he says.

Ireland, he points out, currently doesn't have the infrastructure to deal with its population, and forecasts already suggest there will be one-and-a-half times more people living here over the next 20 years.

"Ireland's solution to housing is shove people beyond the M50 or outside Cork or outside Galway, and then we pay a higher penalty in carbon tax [because of the commute].

"Unless we grasp the idea that we have to live within urban locations, we will have a huge problem."

He adds that semi-detached houses - the most popular type of new-build homes in Ireland - "should be banned".

"There is no requirement to build semi-D's in this country. If we look at the demographic, we could facilitate eight to 10 storeys within our cities, and that is not high-rise."

"There will be three-quarters of a million more people living in Dublin over the next 30 years - where will they live? They should be reliant on public transport or bikes, or rent a car, and the city should have 10 Luas lines."

"It will be utter chaos if we don't get our act together. In Ireland it's all 'I don't want it here', but the reality is it has to be there." In order to build up urban areas outside of the cities he suggests there should be tax reliefs to encourage people to buy and live in property in towns. "Small towns should have town-city living, and if I buy a property in the town I get tax relief for living there for 10 years. The towns then will have the facilities for people who live there, and if you get a vibrant community you can provide public transport."

Mr Wallace reckons the housing market is "a blood-bath" for first-time buyers in Dublin.

"This will continue, in my view, for the next three to four years."

"We are coming up to a bubble, and I would be afraid that if the bubble comes before we build enough houses we will be rightly stuck," Mr Wallace says.

"You will have a wave of build-to-let accommodation, which will come online around 2020 and 2021 and the rental market will stabilise and rent will reduce," he says.

However, in his opinion, there is no short-term solution.

"And political parties need to be honest about that. After two to three years the market will change and houses will come online," he says.

The lack of will to build social housing "is a disgrace will come back to bite us".

We move the discussion to business on the main streets. Wallace thinks the retail sector is in "complete chaos".

"There are only so many restaurants and coffee shops you can have, and we have reached saturation."

On the other hand he thinks the hotel sector in Ireland "will still be very active".

"My concern would be outside influences and if they cause another dip or recession, it is hard to think we are four years into an upwards cycle of the economy. There is three-four years left, but that could be impacted by outside forces."

Whatever does happen in the Irish economy in the coming years be it good or bad, Wallace, who has been through it all before, is designing his own business to withstand it.

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