Weekend Interview: Swire President Henry Bott On Miami’s Growth And Building A New Hub Of Finance

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.

Henry Bott has been embracing the Miami lifestyle since he moved to its Brickell neighborhood in January after being named president of Swire Properties.

He spends time outside with his two kids and explores the food scene on Saturdays with his wife, but he’s been having trouble finding the time to get outside of Brickell, where Swire has been developing properties since 1979 and recently announced two new projects.

Bott runs the U.S. real estate arm of Swire Properties — a Hong Kong-based company that is part of the UK-based conglomerate John Swire & Sons — which announced in June that it was partnering with Mandarin Oriental Hotel Group on a branded hotel and residence project that will occupy the last development site on Brickell Key, an exclusive island just off the mainland. 

Just a month earlier, Swire and Related Cos. started demolition at the site of One Brickell City Centre, a planned 1,000-foot-tall office tower that would be the tallest commercial building in Florida and that Bott says will help cement Brickell as the top destination for financial firms relocating from northern cities. 

The 1.4M SF office tower will add to Brickell City Centre, a mixed-use complex covering 9 acres that includes office space, a hotel and retail mall. Bott’s been busy there as well, helping to secure tenants for the 500K SF of retail space that first opened in 2016 as a luxury mall but has shifted in recent years toward lifestyle-focused retailers. 

In this interview, Bott speaks about the commercial real estate landscape in Miami, how his experience developing mixed-use projects in Asia informs his South Florida strategy and why he believes Brickell is going to become the “Wall Street of the South.”

This interview has been lightly edited for length and clarity.

Bisnow: You arrived in Miami about six months ago. What have you learned so far about the city, and how are you and your family adjusting to your new home?

Bott: I arrived in mid-January and so it's been about six months, but I've loved it so far. I'm learning that Miami is a very diverse and energetic place, which is great. I've worked all over the world so I really enjoy assimilating into new cultures, learning about the city, the language, the people. All that's been great. I have a wife and two young kids, a 4-year-old and a 1-year-old, and they've loved it. We're living on Brickell Key, there's loads of green space, we go running around the Baywalk. It's just a fantastic lifestyle.

Bisnow: Would you say Brickell is your favorite neighborhood?

Bott: I say Brickell is sort of my epicenter of being because the office is here, Brickell City Centre is here, I live on Brickell Key and our projects are here, so I have to spend a lot of time in Brickell. But I've said to my wife, “We got to get out of the bottle a little bit.” So we have made an effort on weekends to go and explore some other areas as well. 

Bisnow: Before moving to Miami, you were working for Swire on its projects in China and Southeast Asia. How did that work inform what you're doing in South Florida?

Bott: I actually joined Swire in London, where the ultimate holding company is headquartered, and then was secondment out to Asia, where Swire Properties is perhaps best known for our commercial mixed-use projects. So I had a lot of experience learning about the design, development and operation of truly integrated mixed-use schemes. 

That has set me in very good stead for coming to Miami and managing Brickell City Centre, which is a good example of a truly integrated mixed-use scheme. Operating that existing asset, and then also now designing and developing the extension of Brickell City Centre — which is going to be One Brickell City Centre that we're doing with Related Cos. from New York — that Asian experience working on those schemes has given me a lot of familiarity with which to manage Brickell City Centre.

Bisnow: You held a demolition event in May at the site of the planned One Brickell City Centre office tower even as some office assets are struggling and return-to-office rates lag. Why does it make sense to be developing an office tower in Miami right now?

Bott: We feel that we’ve got the best site with the best partner in the best market in the U.S. right now. It's as simple as that. We're aware of the macroeconomic environment and the challenges that the rest of the country are facing, but Miami is really bucking the trend on that, and you'll see all the fundamentals are very positive in Miami. You got a huge net inward migration from last year, there's positive absorption throughout 2022 and in the first quarter of this year, and much lower vacancy rates than other cities in the U.S. All of that gives us a lot of confidence.

Bisnow: There's been lots of talk about the difficulty finding financing and how rising interest rates are affecting lending. Has that affected the development of this property or any of your other projects? Is the rising cost of debt a worry for Swire?

Bott: With One Brickell City Centre, specifically, it's something that we're aware of because the new development of office in the U.S. as an asset type is perhaps towards the bottom of the food chain. But because we have such a prime site with such a strong partner, who has very well-entrenched relationships with lenders and outside capital, that means we're pretty confident that the project can proceed and that we're not going to struggle in the ways that perhaps other projects do in the U.S. 

For Swire in general, we take a very long-term focus as a company. We're a 200-year-old company, and we have a very strong balance sheet. So whilst we're aware of the interest rate environment, we're less affected by it because we tend to self-fund our projects globally and are less reliant on external financing.

Bisnow: When the retail component of Brickell City Centre opened in 2016, it was very focused on luxury retailers. Then, during the pandemic you added the mini-golf company Puttshack, and more recently the mall added another round of other tenants that aren’t strictly in the luxury category. Is there a shift in the retail landscape that you're reacting to or what's driving the tenant mix at that property?

Bott: At any new mall development from the ground up, it takes time to reach an equilibrium and find its true customer. You’re right, we started off with more of a luxury positioning, but over time we found out that what was really desired and appreciated by the typical customer was something that's more contemporary, a bit more lifestyle-focused. 

That re-tenanting and rejigging of the trade mix started before Covid, and was unfortunately delayed by Covid, but since Covid has ended there’s been a speed up of that re-tenanting. So you’re seeing the brands that have come in in the last 12 months are the likes of Nike, Blue Nile, Warby Parker, Intimissimi, Levi’s, Psycho Bunny; they’re really good examples of the new, more contemporary lifestyle mix that we’re going for.   

Bisnow: You announced in June the One Island Drive hotel and condo development on Brickell Key in partnership with Mandarin Oriental. There's been a burst of these kinds of branded condo projects, especially in South Florida. What do you think is driving developers to partner with brands? 

Bott: At the luxury level, buyers want to purchase a lifestyle. It's not just a piece of real estate, they're really buying into a lifestyle and all the convenience, security and privacy that comes with that. Being able to buy a condo that has a brand and a hotel component behind that, like we have with Mandarin Oriental, means that they can just plug into that lifestyle. It's a very compelling proposition and, therefore, developers can charge a premium for that lifestyle.

Bisnow: These projects represent a pretty big bet on Miami's continued growth. Why is Swire so bullish on South Florida? 

Bott: We're bullish because we've been here a long time, so we know the market well. We've been in Brickell since 1979 and we've always been strongly committed to Brickell. Now you're seeing us really doubling down on that with these two new projects. The fundamentals of the market we feel are very strong, and then Covid has catalyzed this idea that people can work from anywhere. South Florida is hard to beat in terms of the lifestyle, whether it’s the warm weather, the diverse mix of cultures and cuisines, the obvious tax benefits or the very business-friendly environment. Post-Covid, coupled with all of those attractive points, is just convincing more people to move down here.

Bisnow: I want to ask about the environmental, social and corporate governance side of things. Swire has its SD 2030 plan that's trying to position the firm as a market leader for sustainable development. Swire has baked that into its South Florida strategy, for instance, with the 2021 plan that Swire helped develop to protect some of Miami's coastline. At the same time, there seems to be a marked turn away from ESG among investors and developers. Why does Swire still emphasize sustainability and environmental impacts? Is it something that your shareholders still demand?

Bott: It's certainly important to our shareholders but, at the very basic level, we're a 200-year-old company and we want to be around for another 200 years. We don't want the cost of our growth today to in any way jeopardize the ability of our stakeholders, our communities, our staff to grow tomorrow. 

A lot of what we do is ensuring that we can grow it in a way that doesn't compromise the local environment. The Back Bay study we helped with in 2021 is a good example of that, the climate ribbon that covers, shades and acts as a natural ventilation system for Brickell City Centre is a good example of that as well. 

We have these quite ambitious targets to hit by 2030 and then also by 2050, which is our net-zero target, but we've been very transparent about sharing the science-based KPIs that get us to achieving those goals. Every year, we have an SD report that details how we are performing against those checkpoint science-based targets so that our shareholders and the communities in which we operate can track those.

Bisnow: How do you square that circle, that you're focused on sustainability and ESG but are developing properties in Miami, a place that is really on the forefront of potential climate-related challenges?

Bott: I think there’s no better place to put those initiatives into play then the areas where they really need it. Brickell Key is right on the waterfront, it's potentially exposed to storm surges, and that's why as part of One Island Drive we’ve committed to upgrading the seawall around our section of the project to a level that's actually beyond the code requirement. And then we’re working with the rest of the residents on Brickell Key to support them about how best to upgrade their own seawalls as well.

Bisnow: Are you going above and beyond the code requirements because you're trying to future-proof the property or because you think that it's necessary now?

Bott: We think it's necessary now. We’ve done our own studies and we believe that going a bit higher is appropriate. If we can do that in a way that's both functional from a storm surge prevention perspective, but also ties in with the aesthetics and the design of the landscaping around our project, that seems to be the perfect solution.

Bisnow: What's a bold prediction you have for the next year?

Bott: The next year is the year that Brickell really continues to fulfill its potential for being the Wall Street of the South. It's going to be a really exciting year.

Hopefully we're going to be kicking off and moving forward with One Brickell City Centre, you're going to see all of the tenants moving into [the under-construction and fully leased] 830 Brickell, with that being the best example of a Grade A office in Brickell at the moment. [Citadel’s] Ken Griffin obviously has been very vocal about his new site in Brickell as well.

So you've got all of these factors at play, and there’s going to be a major confluence in the next year and I think Brickell is just going to pop. 

Bisnow: This is the weekend interview. So what's your favorite weekend routine or favorite weekend activity?

Bott: My typical weekend activity would be playing with my kids, doing my fatherly duties, which obviously I enjoy. But I'm a bit of a foodie and I enjoy trying out all of the amazing restaurants in Miami with my wife. We always try to go out every Saturday night to try a new restaurant, and there's plenty to get through.