Mark Thompson runs Swan New Homes and I think he is a wily Liverpudlian. The accent reveals his origin immediately. I’m from Manchester and we “Mancs” have a curious relationship with our north western neighbours. I have known Mark for a number of years and increasingly our encounters are spiked with a stream of Anglo-Saxon invective related loosely to the sporting rivalries between our great home cities. Putting this to one side (only ever briefly) I have recently worked closely with Mark and Swan through the torture of a competitive dialogue process to secure the preferred bidder status for LB Tower Hamlets’s and HCA’s Robin Hood Gardens scheme.
Swan won and Mark is understandably very happy!
A proposal for 1600 new homes; 50% of which are (old world) affordable; and no grant. It is big and it will be beautiful!
A few weeks ago, Mark and I met up in Cannes for the MIPIM exhibition and after his spicy monologue celebrating a very recent sporting victory, we found time to reflect on the ingredients that made for a successful bid. Firstly we agreed, “It ain’t rocket science!”.
Tower Hamlets has long been a strategic borough for Swan. They have over 2,000 homes in the borough. They know the local communities. They understand the local politics and they know how to listen to, read and work with the local authority. More practically, immediately adjacent to Robin Hood gardens, Swan are coming to the end of the construction of a prestigious development (“Streamlight”), which afforded them the opportunity to offer leaseholders on the estate an irresistible old for new (at no additional cost) offer. Local intelligence enabled us to identify other “decant” capacity sites in the vicinity. This is not serendipity; it is being in for the long haul. Mark and I agreed that the strategic relationship with key boroughs is going to become ever more critical in what Mark calls the “new world”.
“Successful development has always been and continues to be about the cost and value equation. What does it cost to buy and build? What is the end value? If the latter is greater than the former then we have a deal”, says Mr Thompson. But in the new world, much more than ever before, “cash flow is king”. Up front capital grant used to soften this but now it is a much more commercial arrangement and cash utilization is the new language.
Link this to that old adage, ‘location, location, location”. Robin Hood gardens sits in the shadow of Canary Wharf. Ask any commercial sales Director what it takes to sell London property off-plan in Singapore, Mumbai or Hong Kong. They’ll tell you the two key factors are, proximity to an iconic location and good transport links. The outright sale stock from Robin Hood Gardens will go overseas early…. in homage to King cash-flow.
None of this is particularly profound, but these are just some core principles which Mark slavishly follows. “There has to be more to it than this”, I prompt, “There must be some rocket science?!?!?”. “Yeah, we work hard!”. Mark winks, smiles like an alchemist and wanders off.
Chris Wood is a Partner at Altair