Susan Freeman
Hi, I’m Susan Freeman. Welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment. Today, I am delighted to welcome Joseph Rajah. Joseph founded B-Corp developer Joseph Homes in 2008 after years of serial entrepreneurship spanning property, events and NGO work. Starting his first business aged fourteen, Joseph is yet to have a ‘proper job’. He considers himself completely unemployable by traditional standards so has no choice but to be a CEO. Joseph leads a team of exceptional people through turbulent markets, growing the company dramatically in fifteen years with the current pipeline of over £1.5 billion of highly sustainable, low toxic mixed-use schemes in London and the Southeast. With a focus on purpose, innovation and controlled profitable growth, Joseph is working to build on the company’s success with its continued expansion. In his spare time, Joseph works on his cunning plan to have more spare time. So now we’re going to hear from Joseph Rajah on how he’s built Joseph Homes, and his vision for its future. Joseph, good morning and welcome to the studio.
Joseph Rajah
Thank you, Susan, thanks for having me.
Susan Freeman
Let’s start talking a little bit about you because I know that you are a serial entrepreneur and I think it would be great for our listeners if we can talk a little bit about your background and how you came to be in, in real estate.
Joseph Rajah
Absolutely. Thanks again Susan for having me, it’s a real pleasure to be here and speak to you. So my entrepreneurial journey starts with, starts with my family actually, so my family, I come from an entrepreneurial family, my father, an immigrant from Sri Lanka, came to London when he was very young, he was early twenties, and started businesses after getting his education to become a university professor, he opened restaurants and travel agencies and all kinds of other things in between but rested on opening and running schools, and that is how I grew up. I grew up in a scenario of uncles and aunts and my father in business and then my mother as well, very hard working, incredible work ethic, entrepreneur herself, who opened a driving school targeting a much needed requirement, especially in the late Eighties and early Nineties of teaching Asian women how to drive and it was a niche because they didn’t particularly want to be taught by anyone other than other Asian women and so she had an incredibly long waiting list of women that wanted to drive and what we realised afterwards was the ripple affect that that freedom of a driving licence gave Asian women that she helped and she’s a bit of a hero in the community as a result of that. So growing up in that environment, it was a sort of a natural progression for me to want to become involved in business in some way and that started in school actually, running a small business whilst I was at school and then growing from that and learning from, well, attempting to learn from failures and progressing. That’s how it all began.
Susan Freeman
Wasn’t there a stint as a lawyer at some stage?
Joseph Rajah
Well yes, so I went to university as a good Sri Lankan boy, and did my Law degree and then I did a placement at, I did a sort of a stint at, you know a magic circle law firm, so the big city law firm and I didn’t like it at all, which was a shame for my family but for me it was just something that wasn’t aligned with the way that I operate and to work in that environment, I have full, a lot of respect for the profession and I love reading Law actually at university, that’s something maybe in my golden age I will revisit that and study some more but practice wasn’t, wasn’t really for me, I just really wasn’t very good at it to be honest, more than anything else, and so I left there and I was running a business at the same time as I was at Law School and also after that and I decided that I would continue the business rather than continue with Law.
Susan Freeman
Well it’s I suppose a loss to Law but you made that decision quite quickly. And what was the business that you were running as a sideline while working as a lawyer?
Joseph Rajah
Well, I have to say I wasn’t working as a lawyer, I was in a placement there and I did a few months so I stopped that quickly but what I did was I ran a night club promotion company, so at university we would put on events within the student union and the wider student population with other universities and we’d put on nights in London, that sort of was a hobby, mainly just to have fun really at university but then that sort of grew into something a bit, a bit significant for my age and we ended up promoting lots of different clubs just in London and then after university that grew into a business and we ended up putting on sort of large events, quite theatrical in nature and it just wasn’t conducive to you know having a day job basically so, I had to choose and I chose running a business and I haven’t looked back.
Susan Freeman
And what happened to that business?
Joseph Rajah
Um, so it sort of just, a combination of growing too quickly and being young, it sort of fizzled out in the end. It grew to something transatlantic actually, so we ended up promoting clubs both in the UK and the US and had a whale of a time you know, 20, 21 years old, it was an incredible journey that we were on but in the end, you know these things have a shelf life and I moved on to the next thing.
Susan Freeman
I can imagine it didn’t go down terribly well with your family, having got you on the right tracks, studying Law, going to a magic circle law firm and then finding you were running parties.
Joseph Rajah
Yeah, well actually, it was a combination, I think they did struggle with businesses that he had because of the various different cycles that he met in the Eighties and Nineties. He didn’t really want the same kind of heartache I suppose for me as well and to have a bit more stability but at the same time he knew that it was in the genes and there was nothing that can be done when that’s the case and so I think he was quite proud actually and similarly with my mother, that we’re in a country that has given me the opportunity to be able to be my own boss and run my own company and have a team and all the rest of it. And so whilst they would probably have preferred in the long run for me to have a little bit more stability, I think actually they, they fully supported everything that I’ve done. And that is one of my, sort of the foundation of everything I’ve done ever since, is that whatever I’ve done and it’s been a variety of things over the last three decades, I’ve always had full support from my family for it, unwavering, which is fantastic.
Susan Freeman
And it’s interesting that you say that being an entrepreneur is in the genes because I often wonder what attributes does an entrepreneur need?
Joseph Rajah
Oh well, I can only speak for myself because the people that I have worked with, who I believe would regard themselves as entrepreneurs and so do I but what I feel an entrepreneur has is actually a sort of a benefit and a curse and it comes with a natural personality trait and so I mean the theory is that I have is that in order to be an entrepreneur, you know it’s an incredibly difficult thing to do to run your own business and to navigate all the different obstacles that come your way and so you need to be able to take risks, you need to be able to have the determination and persistence to be able to you know weather the storms etc. And in order to do that you need, you can’t dwell on the mistakes that you’ve made of the past and you can’t be happy with what is present, I mean you always have to try to improve and to innovate and to find your niche in the market and you need to be optimistic about the future and so the curse and the benefit of being an entrepreneur is that we’re incredibly forgetful about the past, we are extraordinarily critical about the present and we’re eternally optimistic about the future and this is great as a founder, you know because you need to have the momentum, you need to get people on board in whatever endeavour you have but, but as a CEO, there is a transition that you need to make once the business is up and running, you need to be operating at an efficient level, where you need to be a little bit more considered about the failures of the past and you need to be slightly, you know optimistic and cautious about the future and you need to be positive about the present to ensure that everyone you’ve got on board, stays on board. So, there is the parallel there and this cognitive dissonance that I continually have as an entrepreneur that I think everyone else does too.
Susan Freeman
Interesting. And when you started Joseph Homes, which I think it’s your fifteenth anniversary this year so you know congratulations on that.
Joseph Rajah
Thank you.
Susan Freeman
First of all, was there any bridge from running events to starting a property development business?
Joseph Rajah
Oh certainly, yes. I mean, the main bridge that are primed within there, is being customer focussed so, with running events, you’re entirely customer focussed, you’re, you’re providing for a need that the customers really want and sometimes they don’t know what they want until you provide it and so it is important to have your finger on the pulse as what’s relevant and it’s important for you to be able to put yourself in your customers’ position in every, every event that you do. Similarly, within real estate, you know we build, you know we started off building homes, single homes, you know little flats and houses and we honed our craft doing that with design and delivery by really putting ourselves in a position as to what it would be and feel like to live in these properties, what it would be like to live in the neighbourhoods, you know where do we go to the shops and how do we, when we wake up in the morning, what’s our, what’s a morning routine, you know when you come home in the evening and we’re coming home with our shopping, you know where we’re putting our goods, where are we taking our shoes off and the entire thing is done as a story and we have this narrative, to this day, in our design team meetings and are we, we brief our external consulting teams accordingly to the level of detail that we need them to feel, what it feels like to be in these properties and so the bridge between the two businesses is definitely being entirely customer focussed.
Susan Freeman
So, it’s interesting, with the customer focus, was the vision when you started the business, was the vision always to focus entirely on the customer? What was the most important thing to you when you started the Joseph Homes business?
Joseph Rajah
Well it’s in the name really. So we wanted to create a home, you know rather than real estate property and that’s the way that we look at it to this day, it is something that we truly believe in. I do think that our mission, our purpose here, is quite an important one and it’s one of the most important things to individuals, our customers, is where they’re living and how homely their home is. And so we have that customer focus in everything that we do and it’s important that we relay that and convey that to the wider team, including our external team, who are helping us deliver.
Susan Freeman
And did you set out to disrupt? Did you look at what was going on in residential development and thing right, we’re going to do this differently?
Joseph Rajah
To a degree, yeah, I mean at the beginning to be honest it was an opportunity led thing, I’d come back after, in between the nightclub business and going to real estate, I’d worked with NGOs in the developing world and I learned a lot over a number of years in terms of the importance of business, the role that business plays in society and it taught me a lot during that period as to what my role should be going forward if I’m going to continue being in business and so having a business that exists, to be a force for good, is really important to me and so when I came to the UK, I looked at where I could most benefit people and in a combination of, as a child moving so frequently with my dad’s businesses and that kind of thing, I felt a real need to be able to deliver homes to people, I think it was a need that I thought that needed to be met in terms of the quality, sustainability and low toxicity, so that’s the way that we’ve been delivering to this day.
Susan Freeman
It’s interesting, I mean you talk about low toxicity and it’s not something that often gets mentioned by developers and during Covid people were more aware of you know the air, what they were breathing, but can we just talk a little bit about that, I mean how, how do you go about reducing toxicity in people’s homes?
Joseph Rajah
Yeah, absolutely, so yeah, so air quality basically is what we’re talking about here and it is not something that’s, you’re right, or something that’s talked about widely in a national level and I think it’s really important that we do. Indoor air quality is sometimes, in fact quite often, worse than outdoor air quality and so it’s important that we do what we can within our homes, whether it’s been built this way or not, you know you don’t have to have a home built this way but you can do something about it and do it in your existing home now to simply improve the quality of the air that you’re breathing, especially if you’re spending, you know you’re working from home and you’re spending a long time within your properties. Indoor air quality has been linked to respiratory illnesses and other illnesses and so the way that we go about doing it is simply improving the air by what we put in the property, how the materials that we use, the way that we construct the property and also the filtration systems that we use. So we have for many, many years since, since, in the last fifteen years almost, been putting air filtration systems within our developments, we’ve been using low to no toxic paints and glues and organic materials, we have been continually monitoring our air quality of the different developments that we’ve done, which culminated in our site in southwest London which received an A rating for air quality, which is on a main road, so we do believe in this, it’s quite important, it’s quite close to our heart and we will continue to keep improving the way that we deliver purified air within our homes.
Susan Freeman
And is it something that your, your customers ask for or is it something that you know is better for people to live that way and so you are sort of educating them?
Joseph Rajah
Yeah. So we’re still educating our customers. It isn’t something that they ask for at the moment but when we do tell them about it, you know our sales centres etc, they are generally surprised actually that indoor air quality seems to be an issue. Most, to the most part, people think they close the windows and the inside of their home is their inner sanctum and it’s something that they feel safe in. To think that they are unsafe within their own homes is a bit of a shock to them and so they are pleased that we have these endeavours within our developments but there isn’t a premium as such for the homes that we deliver in terms of price, it is something that we do because it’s the right thing to do. In terms of the market going forward, I think more and more developers now are paying attention to this, there’s some incredible developments out there doing great things now which I’m really pleased about and in fact more than what some of the things that we’re doing and we’re learning from them now and just, which is great. My business partner, Paul Dipino, who is our chief innovation officer as well, has travelled around finding new and innovative ways to be able to meet our objectives in terms of indoor air quality as well as sustainability and we think that actually at some point similarly to commercial buildings that are BREEAM Outstanding, BREEAM Excellent, rather than there be a premium for those office buildings, there will be a discount for those buildings that aren’t and that’s it, that’s what’s going got be happening in the residential space as well.
Susan Freeman
Yes, that’s so interesting because the focus has been on, on the air quality in office and not so much focus on air quality in homes and you mentioned wanting to be a force for good and of course Joseph Homes was one of the first developers to become a B-Corp and it would be I think just interesting to talk a little bit about you know what that means to you, how it affects the way you run the business.
Joseph Rajah
Absolutely. So, and also similarly with you, Susan, with Mishcon de Reya, I think one of the first law firms, or first law firm, to be a B-Corp as well, which is fantastic. I think B-Corp is a fantastic accreditation certification system and a community now globally for businesses that wish to be a force for good and wants to find out how they can be one really and how they can learn from other people in the community to progress their mission. I think it’s a natural thing for a business who wants to be a force for good to become certified in some way, a B-Corp is not the only certification they, one could get, and I think it’s a logical thing to do, I think if you take a long-term view of the world and your place within it, it’s both morally and logically inept not to create a business that adds more value than it takes and I think that is what the essence of B-Corp is, is that you have an understanding, a holistic view on impact and reward and as a result of that you make a huge commitment to delivering on that promise by changing your articles of association, which are the, as you know, are the governing documents for running a business, by changing them to take this holistic view from, from shareholder supremacy to stakeholder supremacy, from taking a view on all stakeholders and how whatever you do in your business impacts all of the stakeholders and taking a holistic view on that not only profit but impact as well and I think we’ve been doing this anyway for fifteen years under what we call our Live Well manifesto and initially we were actually going to come forward with our Live Well manifesto as the accreditation certification system for ourselves and offer it to others but then we found B-Corp in that process and thought well, they do the same things, brilliant and let’s just, let’s just sign up to B-Corp, that’s going to be easier for us but also it’s a portal to an exceptional community of entrepreneurs, you know big and small, around the world that is a great support group.
Susan Freeman
And it also requires you to progress so you get recertified on a regular basis don’t you and you have to increase those scores, you can’t just rest on your laurels and say right, we’ve got B-Corp accreditation.
Joseph Rajah
Absolutely, Susan and I think was it last week, we just recertified so that’s, that was a big step and we were, we have a tzar of B-Corp within the business who, her name is Chinah and she is all things B-Corp and she helps us get recertified, which wasn’t an easy process honestly. They make it difficult, for good reason, you know, it needs to be somewhat of a, an exclusive club promoting inclusivity, if you like and standards need to be met and it’s to avoid things like greenwashing and just sort of you know tick boxing. You have to genuinely want to do this in order to go through a bit of the pain in order to get certified.
Susan Freeman
And you also apply your, your Live Well principles to your team, construction workers, people that are involved with the business and I think you sort of run things like massage and mindfulness and those sort of things, I mean how does that work?
Joseph Rajah
Yeah, so our philosophy is that a happy team delivers happy homes and we think that you know it starts with internally, you know with ourselves but then internally within the teams to deliver on a full team so, in order to do that we have looked at every aspect of the business and all the different teams that we’ve got, you know on site or within head office and figured out not only through just what we think but also via committee, via asking what’s required, what is going to help people feel genuinely fulfilled and we think we’ve got this down now to a bit of an art, bit of a science in how to do that and one of things, as you mentioned, was this massage thing that we did with our construction workers. There was a particular type of massage required in order alleviate some of the unique strains that our construction workers were facing and so my sister actually, who is a professional massage therapist, we got her on site to bespoke this kind of thing and it was really well received and so when we go back once a year and ask people, you know in our team, what is that they liked about the year in terms of what we provided in terms of trying to achieve, help them achieve fulfilment, one of the things that they said was like, let’s keep this massage thing going, and you know obviously there’s some huge therapeutic benefits to massage but I think it was just the fact that they just, people just liked the fact that you know we cared enough I suppose and I think that goes a long way in feeling wanted and in feeling fulfilled.
Susan Freeman
It sounds as if a lot of thought goes into everything that you, you do in the business and I think we should talk a little bit about the business because you have a substantial pipeline of schemes across London and the southeast and it would be great to get a sort of overview of you know what’s going on because I know it’s not all residential. Could you give us just a sort of overview and then we’ll maybe talk about a couple of the um, the projects.
Joseph Rajah
Yeah, of course Susan so yeah, we’ve got a significant pipeline now. We have slowed down on our construction actually from 2022 to see how things settle in terms of bill costs and you know any inflation generally and we want to ramp up again in the end of this year to beginning, in quarter one 2024 again but yeah, the pipeline’s, we diversified and also quite centralised to the southeast, predominantly London so we have over 3000 homes in the pipeline, 1300 student beds, we diversified into PBSA, we’ve some co-living coming through, a few hundred thousand square foot industrial, all with this Live Well, Work Well principles of highly sustainable, lower toxic environments to be able to work and rest in. I think with that we’ve increased our team in terms of its skillset to be able to you know deliver on this diversified objective which has really helped us as well you know because over the last fifteen years we’ve been caught, you know being completely residential, market sale led, been caught by the cycles and we decided a few years ago, actually pre-Covid but Covid really you know punctuated the fact that we need to get this thing done just to diversify into other alternative sectors and so PBSA, as I say about 1300 student beds coming through the pipeline at the moment and our objective is to get to about 5000 over the next few years, and similarly with co-living. It’s a really interesting resilient market, kind of cyclical to a degree when you’re relative to residential market sale and I think it’s super important that we both understand that, the sector and also deliver all the same promises we’ve been delivering on within residential market sale.
Susan Freeman
So, at the moment, what percentage of the business is residential sales, home sales, and what percentage is the student, co-living and other, other uses?
Joseph Rajah
So at the moment it’s heavily weighted to alternatives but that’s just the nature of where we are in the cycle, so we are over 70% alternatives at the moment but our mission by 2025 is to be 50:50 market sale and alternative space. You know, BTR is also something that we’re delivering so, so 50% by revenue would be BTR, co-living, PBSA and 50% by revenue would be market sale. You know our homes a home whether you’re renting it or selling it but being British I suppose, I do believe in homeownership, I do think it’s important that that is a sector that doesn’t die in this country, I do think that you know a variety of different tenures is important but to move towards fully rental like we are elsewhere, that there is elsewhere in the world, in Europe, I’m not entirely sure I buy into that and I think I own my own home, I have rented for many, many years of my life, there is a difference and I think people who want to seek that difference should be allowed to be able to do that and, and so therefore by 2025 we hope to be 50% market sale.
Susan Freeman
And just looking at, at some, obviously there are, there are a number of schemes but I know we’ve talked a little bit about the Waterside scheme at Gravesend where you’re looking at a, at a fifteen minute neighbourhood. Can you tell us a little about what you’re planning there and who you’re working with?
Joseph Rajah
Yeah, absolutely. So it’s a masterplan, we work closely with a, an architectural firm called JTP for 1500 homes and commercial spaces just outside of Gravesend town centre on the river. It’s a truly exemplar development, we’re hoping to deliver a net zero fifteen minute neighbourhood and you know, as you know, you know just simply being able to walk fifteen minutes to anything, all the things that you need and that’s fundamentally what it is, to limit, limit traffic flow and to improve health and wellbeing. We have had an incredible support from Gravehsham Council in this development, you know truly entrepreneurial borough, council, and I think without this support we just wouldn’t, we wouldn’t have been able to achieve the things we want to achieve there and now we are, you know we have been delayed in terms of the deliver there because we’ve got the consent during Covid, now we are trimming out that now and we are hoping for build cost inflation to you know, pause, if not drop and at that point we’re going to be start delivering on our promises there.
Susan Freeman
So what’s the timing that you hope for on that scheme?
Joseph Rajah
We want to start next year.
Susan Freeman
And it looks, I mean just looking at it, I mean it’s on the water isn’t it so, really nice setting.
Joseph Rajah
Yeah, it’s, it’s really quite beautiful, there’s a, you know it’s, there’s a big sailing environment there, you know there’s a sailing club next to it and so there’s people who you know use the Thames there and you know they, it’s one of, it’s part of the culture of Gravesend which goes back you know centuries really in terms of it being in a Thames industrial place and then since then people have been using it recreationally and therefore you know our development, we’ve brought the Thames into the development, we’ve got a marina within the development and there is this old disused canal that runs through the spine of the development which we’re going to reinstate. It’s one like, well it’s our first foray into master planning really and we have our second model coming through in North London now and I genuinely think it’s the next evolution of Joseph Homes is to, it’s Joseph Homes regeneration play which is to take pockets of the country or cities and regenerate whole areas and you know it’s a natural evolution for us from going from single homes to having development schemes to newbuild schemes to larger newbuild schemes to now regeneration schemes. Fifteen years is I think is enough time to cap the learnings we needed to have in order for us to be fully equipped and to have grown organically to now be trusted, you know trust is the word here, trusted to deliver on a regeneration of an entire neighbourhood following on and continuing with our Live Well manifesto mission.
Susan Freeman
And, as you say, trust is so important when you’re working with Local Authorities and you’ve got to have the same, same goals. And do you have any partners on the, on the Gravesend scheme?
Joseph Rajah
Yes, so at the moment we’re going to be doing this with Homes England, hopefully, we haven’t signed a deal with Homes England yet but it’s a natural deal to be doing with them and we’ve been speaking to them for over twelve months now and we’re progressing that to hopefully start on site next year and we are working with the landowners themselves so, working in conjunction with them to, we’re fully aligned with them on the long term promise of the regeneration so it’s the only way that these things can work especially in areas like Gravesend where the values are where they are, is in alignment of all the partners and partnerships is how I believe that we’re going to be able to solve the housing crisis, you know it’s, it’s partnerships between landowners, between developers, contractors and Local Authorities and Central Government, you know, it’s all working together in alignment to be able to deliver because viability is a huge issue at the moment even in areas which are double the, the gross development value on a pound per square foot basis of Gravesend, it’s still an issue and to deliver our homes and so, partnerships is where I think is where it’s at.
Susan Freeman
And, you know, as you say sort of bringing the various stakeholders together, you know requires trust and people to be aligned on their vision for the area. And you also, you mentioned the north London master plan, are you able to tell us a little bit about that?
Joseph Rajah
Yeah, absolutely. So, we are working with the London Borough of Camden as a landowner, we’re just a landowner there at the moment in Kentish Town, in what’s called the Regis Road, the master plan, and we are an increasing landowner there and we’ve been involved for over four years now and we are wishing to work collaboratively with other landowners and Camden to bring forward Camden’s vision of a, a multisector mixed-use, residential-led development there of a few thousand homes over the long term, industrial spaces, commercial spaces and importantly, green spaces and the net zero commitment, which is great, you know, you know we worked with, I mean in London boroughs and whilst it is important to other boroughs to deliver on our sustainable promises, it isn’t necessarily always the priority but whereas here, why we are attracted to this neighbourhood and why we have acquired on condition, you know we acquired land there you know at a premium because of where it is because we are so enthused by the fact that Camden wished to see something that fully aligned with the way that we like to deliver and have been delivering for fifteen years. Similarly we saw similar traits within Camden and, or at least within the framework that they developed with the ethos that Gravesham Council had and so we’re, we’re all in, we’re partnering and we’re continuing to acquire there.
Susan Freeman
It looks like a really exciting scheme, I was having a look at it and I was sort of really you know central part of Kentish Town which seems to be, it’s a sort of refuge site in part at the moment isn’t it.
Joseph Rajah
Yeah, so Camden are also landowners, they are neighbours to us as well and they are also across the street. They have a few, they have two holdings there, so that’s the, that’s another great thing as well is that you know we are going to have more of an alignment with the Borough than perhaps we’ve had with other boroughs because they are neighbours as well and they have a, you know more aligned well within us seeing maximisation of value as well as the optimum delivery for communities.
Susan Freeman
It’s actually quite incredible that you know there are still these regeneration opportunities in central London really because people talk about ‘Oh, we’ve got to build out’ because you know there’s no room to redevelop and then there, there are sites like this so, it’s pretty exciting.
Joseph Rajah
Absolutely, Susan, it’s one of the last ones I think that we’re seeing, so one of the other reasons we’re so attracted to it and we can create you know sort of a mini, little mini King’s Cross I suppose, here and you know just standing on the shoulders of the incredible things that have been done in King’s Cross and you know with Camden, they’ve got the experience, they’ve got the team to be able to steward developers and landowners through the process and you know so, sophistication is there within the Borough to be able to deliver on this and so when they say they’re going to do this, they’ve got the track record to show that they can.
Susan Freeman
Well we will watch this space with interest and as a matter of interest, do you also do any office to resi schemes because we hear a lot about the problems of repurposing sad old office buildings so you know have there been opportunities to repurpose those sort of assets?
Joseph Rajah
Yes, yes absolutely. So I think, I think we achieved the first permitted development consent in 2013/2014 in Wimbledon and since then we’ve done a few permitted development schemes, conversions from office to residential. Real, I mean we are really proud of them and we won awards for those schemes and we’re really happy to have delivered those, however, since that time we have felt that in order to truly deliver on our Live Well manifesto, it’s more conducive to do new build just to be able to get the quality, the air quality right. Obviously, it is highly, more sustainable to convert than it is to build new build but I think the way that we go about doing it mitigates some of those factors to be able to deliver a net zero operationally but also on our promises of reduction of embodied carbon when we’re making huge efforts to be able to reduce that but we are on the lookout now for other refurbishment schemes, we’ve got a few things you know in our, in our whip to hopefully convert to something, to an acquisition, to be able to deliver on those promises but I do think that for the most part, Joseph Homes will be a, a new build developer.
Susan Freeman
And just on sustainability, are you, you’ve signed up to the ConcreteZero initiative which I think is committed to sourcing 100% net zero concrete by 2050. How is that going?
Joseph Rajah
Yes, you are right, we are one of the founding members of the ConcreteZero alongside some big players in the industry which is really nice to see actually everybody sign up to that and it was really nice to go the inaugural event and see how enthused everybody is to be able to deliver on this mission. And there’s some interesting technologies coming through at the moment which we can’t speak about yet but when they do come through, I do think it’s going to revolutionise the way that we view concrete as you know historically something that’s been you know cement and concrete incredibly bad to something that actually could harness and hold and store carbon, like a tree, and so I’m, we’re really excited about that, it’s one of the reasons we signed up to it is that we didn’t want to, we don’t think there’s going to be in the near future an end to concrete, you know, and so therefore it’s not about reducing our use of concrete, it’s about using technology to improve the way that we use concrete and the way that we create concrete to be exact. But I have faith in it and I have faith in it because of the other parties as well who have signed up to this, you know, this is, these are parties who, other developers and housebuilders who can make a meaningful impact if they change the way that they use concrete and I think that would help with the price point and help SMEs who, and you know we can go on and speak about SMEs but as you know Susan, I’m a big, passionate evangelical to speak about, about the position and the importance of SMEs in helping improve sustainability, improve design and also has helped solve the housing crisis but you know we need to make things cheaper for the SME to be able to use them and I think having these parties involved in ConcreteZero is going to help that.
Susan Freeman
So Joseph since you, you’ve mentioned the SME developer, I mean what do you see as the role of the smaller developer in helping to solve the UK housing crisis because the smaller developers seem to get overlooked and obviously find it more difficult to deal with the you know rising costs, the difficulty of you know getting planning and the uncertainties so where do you stand on that?
Joseph Rajah
I stand firmly on the side of the SME. Being one obviously. No, I, look so, since the 1990s there’s been an 80% decline in SME house builders in this country. You know, we went from delivering 40% of all, all new build to 12% today. I think this is part of the reason for the housing crisis but also it causes other issues in terms of creativity, sustainable development, you know and design generally, you know whether or not you agree with Gove’s view of general housebuilding design at the moment or not, what we can say is that SMEs provide the alternative, the creative space and the vision to be able to start something new and provide something original and as well as you know general housing that’s required, we also need to be inspired by the buildings that we see and the homes that we live in and the student developments that we develop and I think SMEs can do that. And the reason why I think SMEs can do that probably more than maybe the PLCs because what’s more important, well within business generally but especially within PLCs with retail adversities is cost certainty and consistency with product and I think that is a hugely important thing and it’s absolutely valid and you know Joseph Homes has lost money by not having cost certainty in the past so I do understand the requirement for PLCs to have that cost certainty but as a result of that cost certainty, things, the consistency becomes paramount over creativity, I believe, in my own personal opinion and therefore there isn’t the room to be able to compete with the larger housebuilders and the larger developers who are delivering at scale at a certain cost and they can charge a certain price as a result. I think SMEs are important, I think SMEs are important in partnership with Local Authorities, with Homes England, I think that SMEs are key to employment, are key to solving the housing crisis and are key to creativity and I do believe that actually the issues that SMEs have, obviously, as you mentioned, it’s, it’s you know cost but it’s also time, you know, time is money for SMEs you know we raise money in the markets to be able to deliver and that costs money and so as a result of that, planning is a huge issue for SMEs because barrier to entry is quite high in terms of cost to get planning but also in the time it takes to get planning. Now I don’t think planning should be necessarily quick you know, we’ve seen, you can look around us and see the issues within cities where planning has been rushed to meet the demand, I think it’s important that you know these buildings stay, you know hopefully they’re going to be there for hundreds of years and so it’s important that it takes a while and you get the community and a collaborative approach and that’s not going to be quick but a certain level of certainty I think is important for SMEs and I think that comes about with having alignment with the Local Authority and that comes about through partnership and so I do believe that Local Authorities should seek to partner with SMEs as much as they can within reason, obviously covenant being a factor, in the hope to deliver something a bit more creative, a bit more sustainable and also to promote what ought to be a huge employer in this country, the SME housebuilding. So, yes, I’m, as you can imagine, passionate and very interested to see how both the GLA, Homes England and the Local Authorities respond to some of the requests that we are making currently to support SMEs across the capital.
Susan Freeman
So, as you said, I mean a lot of the smaller housebuilders and developers have just gone. What more could be done to actually help to support them?
Joseph Rajah
What I think, I think it’s just an understand, a general understanding of how difficult it is to, to be an SME within this environment and therefore to have, to look at viability in a way that’s conducive and coherent with the cost base that SMEs have and so, you know at the moment what we’re doing is, we are being compared to a, a large PLC housebuilder in terms of our cost base and then when discussing viability with Local Authorities, you know it’s the equivalent of you know assuming a newsagent has the same cost base as Asda, you know, and you know it doesn’t and so if you want to have newsagents and you have a sense of community with that newsagents bring and the sense of you know variety as well, you need to support newsagents and I think with us, we just need to be supported generally and just general understanding that when SMEs apply for planning that it’s a little bit different to when a large housebuilder applies for planning, you know we need to be supported with land when Local Authorities think they have small pieces of land that SMEs would be able to deliver in that they need to be looked at exclusively for those, for those pieces of land to partner with. I think there ought to be some type of reflection within viability or a subsidy for those SMEs wishing to deliver at the highest levels of sustainability and 44.28. I think when you’re trying to deliver something which is genuinely for the benefit of wellbeing, health and wellbeing of the constituents that these Local Authorities serve, I think it’s important that that is reflected in the way that we are being asked to deliver and what we’re being asked to deliver in terms of things like CIL, Section 106 and problem housing. I think that smaller RPs should be supported more. I think you know when we work with them they have you know an incredible mission and passion for what they do and we would like to work with smaller RPs more but at the end of the day, larger RPs can pay more for our 106 and for our joint ventures that we’ve got and you know, you know the three developments that we’ve got at the moment in construction are all 100% affordable housing so we do believe in affordable housing but they are all with larger RPs in the country. We went to tender and I really enjoyed meeting with some of the smaller RPs and I wish we could have done business with them but they just simply don’t have the support they need and so, I think, just an acknowledgment of how difficult it is in the first instance would lead to a, just a more of a healthier, collaborative conversation and I think that’s the first instance, just an understanding.
Susan Freeman
Yes that’s interesting and I, I think you’re probably one of the first people that I’ve interviewed who has acknowledged that planning should not necessarily be quicker, that it takes time, it requires deliberation and consultation because everybody’s always so frustrated by you know the time it takes.
Joseph Rajah
Yeah, I just came back from Los Angeles last week and planning is a little bit different there, I was meeting with some developers out there as well and the city is zoned like other cities around the world and so you kind of know what you’re going to get in certain pockets of Los Angeles and whilst it’s helpful for some businesses out there in terms of delivery, if you want to live in a city like London, you know and you don’t want to live in a city like Los Angeles, which I don’t, you know, no disrespect to the people who live in Los Angeles but that’s not where I want to live, I don’t want to live in a big city like that, that’s like that. You need a city to evolve over time you know just like anything in nature evolves, it doesn’t, forests aren’t zoned, you know it evolves and I think that if you want to live in a city that’s living and breathing like that’s as close to nature as you can possibly get, like all evolution, it take, it takes a while, it takes time and you need to have the community on board and communities do know. When you have a collaborative push like that, the end outcome is or generally always the right outcome and we have a 100% track record in local residentials in planning, you know we’ve everything we’ve applied we have got, you know always locally. I think it’s because that we are just aligned with what the community wants you know, as I said right at the beginning of this, this interview Susan, that the bridge between running nightclubs and being a developer is being customer focussed and the community are part of our customer base, you know, we deliver in neighbourhoods and we want part of our Living Well manifesto is you know, is a neighbourhood section, we want our neighbourhoods to be absolutely proud of the developments that we’re delivering and our KPI for that is to have more letters of support than objection, which is you know not easy, obviously but that’s, that’s our goal and I think it’s, it just makes business sense as well you know to not have the expensive appeals and have refusals you know and just to spend the time it takes to be able to get the right concern for that development.
Susan Freeman
That is quite a planning track record and I think it says a lot for what you’re doing. So, Joseph, you’ve done fifteen years at Joseph Homes, you know what are your, your hopes, what’s your vision for the next fifteen years?
Joseph Rajah
I think we’re going to continue an organic growth, Susan, I think you know we’re not, we’re not in any particular rush to be the next you know large PLC housebuilder, in fact I don’t think we’re ever going to be, I think our nimbleness, our creativity is paramount and our priority so, maintaining a lower head count, so in terms of team, externalising as much as we can into external consultants and wider team and continuing to deliver in the alternative space. The thing that we’re going to do a little bit differently to what we’ve done in the past is to have platforms that deliver on certain sectors, so we’ll have a PBSA platform, co-living platform, industrial platform and a, and our market sale will continue as Joseph Homes and I think with that endeavour in mind, I think we will refocus on the way that we’re financed. So, what we have experienced in the last fifteen years is that in order to weather cycles, we’re only as good as the funding that we’ve got, you know we need to have aligned funding and we have, we have for the most part have that. We have had incredibly supportive funders, you know absolutely aligned with what we want to do and how we want to go about doing it and supported us during the difficult times during Brexit and Covid and now, you know, rapid inflation with the war in Ukraine, the funders were really understanding. So, in order to achieve that, what we wanted to do was to make sure that we weren’t beholden to one particular funder, you know as a one umbrella funder for the entire company but instead have had multiple funders with multiple sites so we can then pick and choose who we want to progress with to the next site. Over the last fifteen years we have now got a family of funders and we’re looking to increase that a little bit but not by much but those funders are going to come and involve, get involved in the platforms that we’re creating, so the PBSA platform will have one or two funders that we will simply go to for all of our PBSA developments and similarly with the co-livings, similarly with the BTR and so on and so forth. That’s going to be a little bit different to what we’ve done in the past because now we feel comfortable in being able to, to settle on those funders that we have a long term track record with or the people within those institutions that we are funded by who have now moved to another institution that we believe that individual is aligned with us and so we think that’s the thing that’s going to change. We have, for the future, looked to progress people within the business rather than recruit senior people from externally and so, we are growing our own, as we call it and we are really excited about that and so we’re seeing people come up the ranks at the moment and hopefully one day, I will be superfluous to this business and one of these bright young sparks will take over and I will continue within the group, bolting on businesses, you know going back to my entrepreneurial roots, bolting on new startups to the business that will help grow the business and eventually through a brackets word but it’s actually true as you saw, it’s averting mitigation into our product. And then just continue to have fun really, you know it’s, you know it’s always been fun for us here, we’ve always had a really good time, we’re known for our parties, we’re known for our, our celebrations and we do like a big completion and so just continuing having to have fun really and when it stops being fun then we know we’re doing something wrong.
Susan Freeman
Well it sounds great. So, Joseph thank you so much for your time and here’s to the next fifteen years.
Joseph Rajah
Yeah, thanks Susan, I really appreciate it, sorry it’s taken so long to get this thing organised but we’re here now.
Susan Freeman
No problem.
Joseph Rajah
Take care, thank you.
Susan Freeman
Thank you, Joseph. It was amazing to hear about the Joseph Homes journey to date. Congratulations on your fifteen year anniversary and here’s to the next fifteen years.
So, that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
The Propertyshe podcast is brought to you by Mishcon de Reya in association with the London Real Estate Forum and can be found at Mishcon.com/PropertyShe along with all our interviews and programme notes. The podcasts are also available to subscribe to on your Apple podcast app and on Spotify and whatever podcast app you use. Do continue to subscribe and to let us have your feedback and comments and most importantly, suggestions for future guests. And of course you can continue to follow me on Twitter @Propertyshe and on LinkedIn for a very regular commentary on all things real estate, Prop Tech and the built environment.
And thank you to Feedspot for voting the Property She podcast Number 1 in your list of the 25 top London property podcasts.