You believe creative design is key to a successful development. How are you able to ensure unique, creative design on each project?
Great sites are few and far between, especially in London, where Southern Grove predominantly operates. We, therefore, have to be creative about how we maximise the full potential of each site and this naturally leads to designs that are pretty unique. We’ve assembled a fantastic team of individuals with a wealth of experience and we’re all passionate about design, not just buildings. We’re fairly uncompromising when it boils down to the finish and look of our end product. We want to be known for beautiful habitats, and we’re very picky about the architects that we will work with.
Is it hard to obtain funding from mainstream lenders as an SME developer? How can developers overcome this?
There are a number of factors that influence the ability to successfully secure funding as an SME. The two principal issues are market conditions and a developer’s track record. If the market is relatively buoyant, it becomes much easier to access funding. Conversely, if market conditions are challenging, trying to access funding becomes that much more difficult. The number of years a business has been trading can also have a significant impact on procuring funding and the terms under which it is borrowed.
When we started out, we sourced ‘development management’ roles to create a positive cash flow and track record in equal measure. This generated the seed capital required to have a meaningful stake in the equity of future projects. From that point on, we had ‘skin in the game’ and it becomes easier, as time goes on, to further build your profile and cash reserves.
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What is the main obstacle to reaching the government’s goal of 300,000 houses a year?
There are many obstacles that prevent this goal from being reached. However, the overarching reason is the political and excessively bureaucratic planning system. If the planning process was simplified, developers would be able to focus their time, financial resources and energy on the delivery of new homes. Although attempts to consult with developers on problems with the planning system are appreciated, there just isn’t enough determination from local authorities to help deliver the greater number of smaller development sites that can contribute significantly towards housing targets, particularly in the capital. The planning system needs a comprehensive overhaul — starting with the separation of politics and decision making.
What big changes have you noticed in the industry since you entered it?
I’ve already touched on how the planning landscape has become increasingly politicised in recent years. That has been the biggest and most counterproductive change during my time in the industry. The volume has been turned up on the level of political influence, which has detrimentally impacted the decision-making process. Problems have been exacerbated by virtue of the limited resources and funding available to local planning authorities. These constraints sit against a backdrop of onerous policy requirements, which are often applied in a dogmatic manner with little appreciation of the commercial realities that affect developers and individual projects.
What would be the best piece of advice you’d give to someone looking to get into the development market?
Have a joint venture partner, particularly in the early days. That way, you’ll benefit from their experience and you will share some of the risk. With that as a platform, work hard to deliver returns and keep tight control of your overheads. Re-invest those returns with a belief in your own ability and make sure you take the team on your journey with you. Above all, don’t be greedy. You’re creating deeply personal places for people to live, in communities that already exist. You’ll be juggling their needs with costs, restrictions dictated by the size of a site and design considerations. If you attempt to make excessive returns on a project, you will likely throw this difficult balancing act out of alignment.
How did you get into the industry?
I was destined to be in the property and construction industry and started out by completing a masters in architectural engineering at Leeds University. Out of term time, I was a chain lad on the Sheffield Supertram, working for an architectural practice and a structural engineer. After my masters, I joined the graduate scheme at the international consultancy and construction firm Mace. I learnt a lot there, working alongside some of the best talent the industry has ever seen.
If you weren’t a developer, what would you be doing?
The mind boggles … but I would probably be in the film industry. I am passionate about film and I have funded four films, including ‘Supersonic’ (the documentary about Oasis) and more recently ‘Diego Maradona’ (currently on general release). At the moment, I am working on a gangster box set focused on the North of England, beginning with a book, then a screenplay, followed by a film series. It is not unlike the property industry in that you give it your all for three years, market and sell the product, and then move on to the next deal knowing you’ve left something of a legacy behind you.