If you asked a London-based property agent to reel off a list of names of well-regarded ‘northern’ developers, the chances are that Muse would feature near the top. After all, the company has created major mixed-use schemes in places like Chester, Stockport, Manchester, Salford and Ashton-under-Lyne.
However, this ‘northern specialist’ perception would not be quite right. While it is true that Muse has delivered a number of significant schemes across the north of England – and particularly in the North West – its portfolio and development pipeline actually stretch the length and breadth of the country.
Property Week caught up with Muse’s joint managing director Matt Crompton to find out what the company is working on at the moment and what opportunities he is eyeing up for the future.
Few people know the Muse business better than Crompton. He joined Amec Developments – which was bought by construction company Morgan Sindall in 2007 and renamed Muse – 26 years ago as a senior development surveyor and has worked his way up the management ladder.
We have a good cross section of geography and sectors, which makes us quite resilient
Although the business may have changed hands – and names – the focus remains the same today as it did a quarter of a century ago. “From the inception, it has been all about area-based, mixed-use regeneration,” says Crompton.
That is not to say its strategy hasn’t evolved over time. For instance, around 15 years ago Muse embraced residential development, to the extent that today around half of its projects have a residential focus.
“We like to think we have good sector resilience across residential and all the commercial sectors,” says Crompton. “We’ve also got a good geographic spread. We’ve got an office in Glasgow, one in Leeds, one in Manchester and one in London, so we have a good cross section of geography and sectors, which makes us quite resilient.”
Challenges of London
Although he understands why some people may view the company as a northern development specialist, he feels the tag is slightly unfair.
“Historically, we’ve probably been centred around the North West, but we have always had a London office,” says Crompton. “It’s less difficult to be ‘positively conspicuous’ outside London. Outside the South East, we’re a big fish in a reasonable-sized pond, but in London, while our office is big, the market is so expensive and buoyant – I suspect you’ve got to be one of the big propcos like Landsec or British Land to make proper waves.”
That is not to say that Muse isn’t interested in doing business in the capital. Indeed, it has an impressive list of developments under way in Zone 2 and beyond.
“We’ve got projects in Lewisham, Brixton, Brentford, Canning Town and Tottenham Hale that are all live and doing great things for those town centres. However, we have consciously avoided the relatively volatile market of Zone 1, where it is all about having the biggest cheque and developing huge edifices. We’re not about that. We’re about regenerating strong town centres that have good dynamics.”
To underline his point, Crompton cites the example of Lewisham, south-east London, where the company is building a resi-led mixed-use project called Lewisham Gateway on a roundabout site that required the local road network to be reconfigured and the diversion of two rivers to create a development site.
The projects we are interested in have to be about regeneration, not just walking off with the biggest cheque
Another good example of the sort of project that is Muse’s bread and butter is Stockport Exchange in the North West. Muse is delivering a sizeable mixed-use scheme on the site of a former leisure complex, which was bought by the council.
“A lot of the site was car parking so we hoovered up the car parking from the surface and put it in a multi-storey car park that we sold on. We then demolished the leisure scheme in phases and developed a Holiday Inn Express and an office building that we developed speculatively, but which sold within six months of completion. We’re now demolishing the cinema and going in for planning this month for the next phase of offices.”
Crompton says that the Stockport scheme exemplifies Muse’s core strengths as a developer. “It’s about knowing the local dynamics and making sure that whatever you’re doing is fit for purpose and that you’re not developing things that won’t sell.
“Crucially, it’s also about choosing the right partner. A lot of what we do is in partnership with the public sector, so it’s making sure the public sector landowning partner is proactive, approachable and supportive, and then it’s about aligning your interests. As a business, we are focused on return on equity, but that doesn’t mean to say that is offensive to landowners who want to create regeneration. They are two compatible interests.”
As for future opportunities, Crompton says these have to be significant in scale and preferably involve multiple phases. “After you’ve spent all that time building a relationship with the landowner, you don’t want it to be over after one phase. The projects we are interested in have to be about regeneration and not just about walking off with the biggest cheque.”
Not that the company has much capacity to take on additional work at the moment. Crompton says the business is lean and the forward pipeline is very robust. “It’s [worth] just under £2.5bn, so in theory we can deliver our five-year business plan without picking another project up.”
You’ve got to be nimble, don’t overpay and look after your partners – make sure your track record speaks for itself
The other potential issue is the scarcity of contractors – an issue thrown into sharp relief recently by the collapse of Carillion. “There is a skills shortage in the UK and although I wouldn’t say good-quality contractors are hard to come by now, any future shortage could end up slowing the market down.”
Other than that, Crompton is positive about the future. However, he says, to be successful, you need to abide by certain rules: “You’ve got to be nimble, don’t overpay and look after your partners – make sure your track record speaks for itself. It’s about sticking to your knitting and doing more of the same – a lot more of the same if we can.”
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