Industry insights from the heart of Howard Group
hive issue 07 Spring 2018
WHERE EVERYTHING CONNECTS UNITY CAMPUS APPROVAL SIGNALS NEW ERA AT SAWSTON SITE...
The deals hitting the headlines
Shaping the business for the next generation
The latest from the Howard community
hive - EDITOR'S NOTE
HALLMARKS OF A GENERATION Caroline Bewes, granddaughter of CAEC Howard
The granddaughter of Howard Group's founder shares her views on the intergenerational aspects of the business "Double or Quits!" my grandfather would declare with a twinkle in his eye as we played Connect 4 – and, to his delight, I lost time after time. Grandpa Howard was a risk-taker and a true entrepreneur. “Stick, don’t twist!” was my father’s advice whenever we played Black Jack – an example of my father’s more cautious and careful nature. The combination of those two generations meant that the Howard Group grew and developed with innovation and verve from its inception in the 1930s to Grandpa’s death in 1979. During my father’s era, together with my mother, the company was steered forward on a path of steady and stable growth for the remainder of the century. My husband, Nicholas, has a combination of both those traits, which now gives rise to some
Grandpa Howard was a risk-taker and a true entrepreneur.
interesting opportunities, but with decision-making always underpinned by careful consideration and a cautious eye on bank debt. Looking to the future, the formation of our Family Council provides a forum for adult family members to express their views, whilst also giving the opportunity to educate the next generation in the family’s values, and the shape and strategy of the business, together with lessons learnt from the past. My brother Gavin and I both recognise the importance of our values and at the heart of the family lies our Christian faith which we both seek, with our spouses, to pass on to our children. Whether or not the next generation takes an operational
part in the business, they will have a role of stewardship and maintaining the family ethos. However, we acknowledge the importance of allowing them to bring their own attributes to bear on the business, especially in a fast-moving world of technology which my grandfather certainly wouldn’t recognise and against which my father would definitely have battled! On that note, our eldest son, Thomas, recently shared with me a YouTube clip of Simon Sinek on “Millennials in the Workplace”. It’s worth looking up for an interesting insight into helping steer the next generation, whatever our circumstances, into the responsibilities of adulthood and the challenges of the workplace ahead of them.
On the cover... CGI of the interior shared space of Unity Campus' multi-occupancy flagship building, The Works. A central two-storey atrium will house collaborative hive space for meetings, socialising and NECTS HING CON RYT EVE WHERE independent working. The light-filled space will be known as 'The Street'.
SIMON SINEK OFFERS INSIGHT INTO THE CHALLENGES AND OPPORTUNITIES FACING MILLENNIALS IN THE WORKPLACE
from the insights Group Industry Howard heart of
issue 07 Spring 2018
AL SIGNALS PUS APPROV UNITY CAM N SITE... AT SAWSTO NEW ERA
hitting The deals nes the headli
ss for the busine Shaping generation the next
Image credits: P6 Mills & Reeve's Botanic House office in Cambridge. Courtesy of Cambridge Ahead
from the The latest community Howard
P7 mOm Incubators' James Roberts with Sir James Dyson © mOm Incubators
COVERING THE ENTIRE SPECTRUM OF PROPERTY ACROSS THE SECTORS, THESE ARE SOME OF THE DEALS THAT ARE CREATING A BUZZ... PLANNING MILESTONE FOR SAWSTON CEMENTS VISION OF THE FUTURE The Howard Group has taken signiﬁcant steps in the redevelopment of its site at London Road, Sawston, with planning consent granted for Phase I of the Unity Campus business park. Initial work will involve the repurposing of an existing concrete-framed industrial building into 63,000 sq ft of multi-let state-of-the-art space. 'The Works', which has been designed by global architectural ﬁrm NBBJ, is due for practical completion in mid-2019. Significant infrastructure work will also be delivered including a new access road from the main A1301 Sawston bypass and the first phase of a decked car-park. Outline planning consent has also been granted for the wider project masterplan,
which encompasses Iconix Park, Sawston Trade Park, and a further five acres of land to the south and west. This development responds to the growing demands of the technology sector and the increased requirements for high quality, innovative business space in South Cambridge. Once the masterplan has been delivered, it will comprise in excess of 250,000 sq ft of offices, labs and R&D facilities, with amenity provision in an estate hub. It is expected to bring signiﬁcant investment to the area, creating up to 1400 jobs. The recent freehold acquisition of the adjacent Langford Arch site from Turnstone Estates for £2.5m further demonstrates the group’s commitment to its Sawston strategy.
SALE OF INDUSTRIAL STOCK KICKSTARTS 2018 Howard Group has sold the Raynham Road industrial estate in Bishop's Stortford to Universities Superannuation Scheme Ltd (USS) for just under £14m. The fully-let,101,374 sq ft site strengthens USS’s holding in the market town close to Stansted Airport.
The industrial estate, originally purchased in 2001 by Howard Group, underwent significant redevelopment as part of a proactive asset management initiative to drive additional value at the site. The sale represents the final milestone in the group's repositioning strategy.
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PARTNERSHIP WITH CAMBRIDGE EDUCATION GROUP Further expanding its portfolio of student accommodation, Howard Group acquired a strategically positioned property portfolio from Cambridge Education Group (CEG) at the end of 2017 and will continue to let the properties through a sale and lease-back agreement. Acquired for a price in the region of £6.5m, the sites include Myers Hall in Thompsons Lane, Montague Lodge and Crossways in Elizabeth Way, and Carlyle Lodge in Chesterton Road. CEG says the properties are an important part of its education portfolio in Cambridge and it is delighted to be partnering with the Howard Group as its new landlord. "We hope that we will find additional opportunities to work together on the ongoing development of our portfolio," a spokesperson added. Globally, CEG has academic centres in the UK, US, Canada, the Netherlands and Sweden.
03 hive - HOT PROPERTY
PROPERTY PORTFOLIO OUT WITH THE OLD...
hive - STRATEGIC FOCUS
SETTING A NEW COURSE
ST JOHN'S RETAIL PARK Bedford Sector: Retail Developed: 1987 Sold: 2014, £32M
Putting sentimentality to one side, the group has not been afraid to dispose of assets that no longer fit the strategy.
STRENGTH IN NUMBERS HOW THE PORTFOLIO SHAPES UP
For a company nearing its centenary, there is little that can be described as antiquated when it comes to how Howard Group conducts business. Confidently delivering its five-year strategy and overachieving in terms of performance metrics, the property division is well-equipped to identify opportunities and act accordingly. With gearing at an all-time low, the company is agile, ambitious and has an appetite for growth. "2018 is a year of consolidation," says CEO Nicholas Bewes. "We've implemented a rigorous and uncompromising strategy to reorientate our property business over the past five years." The disposal of assets in non-core locations has been at the heart of the group's activities, freeing up capital to reinvest in robust sectors, including student accommodation and prime residential. The portfolio now comprises only properties acquired post-millennium – with an impressive 45% growth reported since 2012. Insulating the group from the risks of being heavily weighted in the retail sector was essential, with the £32m sale of St John's Retail Park in Bedford the catalyst for a comprehensive restructure. 'High potential' is the guiding principle as the group defines its course for the next decade and beyond – an exciting and invigorating mantra for a firm that's almost 100 years old.
STUDENT ACCOMMODATION Growing portfolio within Cambridge private student accommodation sector.
RAYNHAM ROAD Bishop's Stortford Sector: Industrial Acquired: 2001 Sold: 2018, c. £14M
SILBURY BOULEVARD Milton Keynes Sector: Office Acquired: 2010 Sold: 2017, £3.2M
WERRINGTON CENTRE Peterborough Sector: Office Acquired: 1997 Sold: 2017, £3.1M
C.£15m investment at Interchange Retail Park, Bedford and Haverhill site in Suffolk.
...and in with the new
hive - STRATEGIC FOCUS
ELIZABETH & JUNO WAY INDUSTRIAL ESTATES, LEWISHAM
Regeneration of London industrial site into a quality warehousing and trade counter hotspot.
Groundbreaking development in South Cambridge as part of a regeneration of Sawston Trade Park, this pioneering scheme is designed with high growth tech firms in mind.
MOUNT PLEASANT HALLS JV with Osborne to transform outdated office space into modern student accommodation for St Edmund's College.
SPILLERS MILL 19 luxury apartments acquired pre-completion from Hill Residential with a prominent location at the burgeoning CB1 Station Quarter.
Key site at Lewisham with national trade counter occupiers and large DHL distribution hub.
Consolidated geographical concentration of high quality city stock in Cambridge and the region.
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Investment in CB1 iconic Spillers Mill boosts profile in residential sector to capitalise on strong rental market.
CAMBRIDGE'S GROWING PAINS
hive - cambridge ahead
Jane Paterson-Todd, Cambridge Ahead's CEO, talks about the organisation's growth modelling data and forthcoming research.
ARE WE A VICTIM OF OUR OWN SUCCESS? TEMPERATURES ARE RISING AS THE ECONOMY HEATS UP
At first glance it’s easy to think Cambridge is somewhat immune to the challenges facing many UK cities in terms of achieving sustainable growth. Speak to the economists who decipher the data modelling used by Cambridge Ahead, however, and you’ll uncover a very different story, says CEO Jane Paterson-Todd. “There is a misconception that successful cities do not face significant challenges, but that's not the case,” she explains. “If you’re already a high growth city like Cambridge, this needs to remain sustainable and that can only be achieved with the right level of infrastructure to keep up with this growth demand. Alternatively, these economies are at risk of over-heating, which may cause companies to relocate. The worry is that this will be outside of the UK, which will have a detrimental effect to the economy as a whole.” With housing affordability and availability the hot topic, figures suggest prices now reach up to 15 times the average salary. "There is no reason to say this is going to change," continues Jane. "And it affects every demographic."
There's a misconception that growing cities do not face challenges, but that's not the case.
TAKING A WIDER VIEW
Building new homes is only part of the solution; it’s about making sure that there is enough housing in the areas that are commutable, with the right infrastructure in place so people can access their place of work, whether Cambridge, Peterborough, Huntingdon, or other towns in the area. The growth data collated by CA compares scenarios to evaluate how to respond to this demand, and, in turn, support projected economic growth. "Cambridge is very wealthy in terms of its high growth – our last figures indicated +8.4% in terms of turnover and +8.1% in employment. That was in 2015/16 and there’s no indication that’s going to decline." In addition, the recently commissioned Cambridge and Peterborough Independent Economic Review (CPIER) will deliver a response to the challenges of growth for the sub-region. "The full report will come out in September with the research and analysis. Our (data) modelling work is part of it, but they’ve also created a very big call for evidence to be informed by the various geographical parts. It’s complex and we must really look into the detail."
to create cohesion The Cambridge and Peterborough Independent Economic Review (CPIER) is a commission co-funded by Cambridge Ahead and the amalgamated GCGP LEP and Combined Authority. Its purpose is to define how a coherent economic growth strategy can be developed for the sub-regional economy. "I’m really pleased that this commission is focused on the whole area and it’s not just about Cambridge dominating the conversation or pushing its own agenda," says Jane. "One cannot assume that the growth of Cambridge, which is huge, or the way it operates as an economy, is reflected in other economies. It isn't – they operate very differently. It’s about recognising that and how to interconnect better." Chaired by leading economist Dame Kate Barker, the CPIER's interim report is due for release in May 2018.
Investing in the FUTURE After a flurry of activity at the end of 2017, the private equity investment division, Howard Capital, is primed for growth... "We have a strategy that we will deliver," says Howard Group's Finance Director Huw Jones, with a matter-of-fact delivery you'd expect from someone who describes part of his role as 'keeping the wheels on'. "We have been doing that very effectively for the last three or four years and there are some very clear parameters against which we measure our performance." Since Huw joined in 2014, Howard Group has exited from all but one of a series of investments in the construction sector. "The previous strategy no longer served the group so we diversified," explains Huw. "We owned a 25% stake in those companies and sold three back to management. The loans we extended into those businesses were all repaid, so they were dignified departures and a win-win for everyone. "The main purpose for us was to exit rather than trying to get every last penny from the deal. We did deals that suited our co-investors, the management team and us." Joining a family business at a time of reorientation has been a challenge that Huw has risen to. With an appetite to move investment activity in a new direction, he has worked closely with CEO Nicholas Bewes to realise the ambition of the group, whilst ensuring the longstanding Howard values are respected. "Nicholas and I spend a lot of time talking about whether our
performance measures have become our purpose in a way, rather than a means by which we measure our success. It becomes about the process, the numbers. Weâ€™re about more than that," he says. Among the early-stage tech firms Huw has identified is mOm Incubators, a social impact medtech venture that earned a James Dyson Foundation international design award. The invention of former design student James Roberts, it is an inexpensive, electronically controlled,
MOM INCUBATORS IS A SOCIAL IMPACT VENTURE
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I could see more social impact ventures in the portfolio.
inflatable incubator constructed to decrease the number of premature child deaths within refugee camps. It's a perfect fit for Howard Group and is a credible investment. "At the moment the focus is on technology, but I could see more social impact ventures in the portfolio," adds Huw. "The idea is to build up a large portfolio of small investments to spread the risk and to get behind the small proportion of those early-stage companies that will go on to be winners."
hive - investment update
hive - THE BUZZ
All the latest activity in and around the Howard Group community.
2018 SleepEasy triples fundraising For the second year running Howard Group supported the YMCA Trinity's SleepEasy in raising funds and awareness to help vulnerable young people with mental health challenges get back on their feet. Donations have reached almost £9000 – three times the amount raised in 2017. All money raised will fund the charity's ‘Access to Employment’ programme, where vulnerable young people are provided with critical support to help tackle mental health challenges, as well as practical guidance to empower them to enter the world of work. Thank you to all who took part and generously donated!
SUPPORTING THE YMCA'S SLEEPEASY WAS A TEAM EFFORT
Sue Hall EXECUTIVE ASSISTANT Sue joined the Howard Group's Head Office team in January 2018 and will be coordinating events as well as providing administrative support for the Chief Executive, Non Executive Directors and Howard family. Previously Sue has worked for commercial and third sector organisations in London and Hertfordshire.
ON A WINNING STREAK!
Haverhill Rovers rule! As proud sponsors of Haverhill Rovers FC, Howard Group is very happy to report that the team is having a hugely successful season. Currently sitting third in the league, the team has not lost a game since the start of December, and has reached the semi-final of the league cup. The squad will play Felixstowe in the semi-finals of the county cup so we wish them the best of luck and hope they will come home with the silverware!
Industry insight from the Heart of Howard Group