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 Tim Heatley. Tim trained as a lawyer but left law behind to found social impact developer, Capital & Centric. He started out renovating a derelict house in his hometown of Salford and now invests over £3 million a week on regeneration projects with a positive social impact. Tim is the founder of Regeneration Brainery, an academy aimed at broadening diversity and inclusivity in property. Each year it mentors over a thousand young adults throughout the UK. He is the Chair and founder trustee of the Greater Manchester Mayor’s Charity, which has raised more than £3 million in the past three years. He has also featured on BBC2’s Manctopia documentary about the property boom and his work on homelessness. And he has recently appeared in the 8-part Channel 4 programme, The Big Interiors Battle. So now we are going to hear from Tim Heatley on the path to be coming one of our most prolific social impact developers and a TV personality to boot.
Tim, good morning. It’s great to finally catch up with you because I think we last saw each other at the Property Week resi conference earlier in the year, I got to co-host a panel event with you with BBC’s Mark Easton, which was, you know, which was a little bit daunting.
Tim Heatley
Yes. You did a great job, Susan, very good job. Impressive.
Susan Freeman
Very kind of you. So, Tim, you’re not only a property developer but a star of BBC2 documentary, Manctopia, and Big Interiors on Channel 4 so, our listeners may definitely have seen you on the screen. You describe Capital & Centric as a social impact developer, which obviously we will discuss but just tell me how you got there. Was there anything in your background that sort of you know made you want to be you know somebody that actually made a contribution, put something back in?
Tim Heatley
I think that, yeah there’s two bits to it really as how I ended up being a property developer and also how we end up with a focus on social impact. I always enjoyed as a kid building dens, I was never particularly talented at football or I couldn’t play a musical instruments, wasn’t in a band but I could build a great den and that was a way of getting mates to hang out with me and spending time together. So that was, and I probably do that now in a different way, it’s just the dens have got bigger and more complicated and they’re more like restaurants and hotels and apartments and houses. So my interest in property probably started there and a bit of upcycling of space as well, a bit like when you build a den really, you know whilst I was at uni I would always, you know I didn’t really pay much attention, I studied Law, I thought I wanted to be a lawyer because I wanted lots of money and because I thought that money was the way that you got independence and were allowed to be creative so, whilst I was at uni I would take some of my fellow students’ artwork and I’d upcycle that and sell it online on eBay when it was in its infancy and I used to enjoy that process of taking other people’s discarded art and repurposing it and reframing it if you like and representing it in a better light and then that moved on to, you know, near to me where I grew up there was an industrial estate where a car auction used to take place every week and I used to buy these beat up old bangers and restore them and repair them, I’m not mechanically minded but I could make them look great and so, that process of taking something that’s unloved and overlooked and improving it, making it better, is kind of what I do now, I do the same with buildings, I stated to do that so, whilst I was a trainee lawyer, I got a mortgage, I was able to get my first house and the little bit of money that I’d made whilst I was at uni, I was able to use that to restore my first house in Salford, the city that I grew up in. So that’s kind of the journey of I accidentally ended up falling into property development and those projects went from a derelict house in Salford to you know lots of different buildings and projects, you know, we have eight live construction sites at the moment and we spend about £3 million a week on average on regeneration. But the social value and social impact bit that is different I suppose because and that’s always been there. When I grew up, mum and dad both worked in the care sector, so you’re always sort of aware of had a I not been in a fortunate position I was in but you know you can have a very different upbringing and a very different background and a very different life and then my dad went into, he went into business and he was a manager in a private business, so he went from public sector to private sector and around that time as well, sometime before that, my mum and dad had agreed, around the 80s when the Care in the Community Act in, my mum and dad had agreed to look after two adults with learning difficulties and learning differences and that happened throughout my entire life as well so, my whole childhood had been brought up, there was people in our house who were there because they had learning difficulties and learning differences and you’re aware therefore of how lucky I was to have a very stable family household and didn’t need to get that after care and support and then I remember my dad lost his job and then I ended up, you know, on free school meals and you feel quite vulnerable. I remember in that dinner ticket queue going in to get your free school dinner, that queue of people that were stood outside the canteen waiting to go in and they made you wait last as well, so you felt a little bit embarrassed and humiliated, I shouldn’t have done but I did and I was a lucky one in that queue because that wasn’t going to be my only hot meal and I’d had a hot shower that morning and, yeah, I had a loving, caring home to go back to but there were other people in that queue that didn’t, that were in care, that that would be their only hot meal of the day, possibly their only meal, and that never leaves you I suppose really, that experience so, definitely wanting to do something to make sure that if I could help, that I did help, has always been a key part of what I wanted to do with my career.
Susan Freeman
Yeah, that does make sense and at what stage did you leave the Law?
Tim Heatley
Almost immediately. I mean I got a Third in Law. I went to Manchester Metropolitan University as well, so the writing was on the wall that I wasn’t that good at it. I managed to do the, you have to do another year called the LPC, which I did and managed to pass first time, I think, so, that was good but I realised as soon as I started training that I wasn’t cut out for it really, I wanted to, following the rules is not what I’m great at, you know, and that’s what Law is often, following the rules and I wanted to change the rules and as a senior partner said, “changing the rules like that, Tim, you’ll end up in jail, you won’t end up any further forwards, you’ve got to follow the rules” and so I thought this isn’t for me this, I’m not cut out for it, I didn’t have the patience and the diligence really to focus. So, and then of course but I bought my first derelict house that I assumed I was going to restore and move into but then I got the bug, that creative process of taking something that was empty and completely destined for demolition probably and then making something great out of it was a much more, you know, much more exciting process to be involved in and so I kind of focussed on that instead.
Susan Freeman
So you started Centric and I think you were still in your twenties when you started it. How did the Capital & Centric come about?
Tim Heatley
So, the other half of Capital & Centric is my mate and business partner, Adam Higgins, who’s a really well thought of property developer in Manchester and we bumped into each other and he was doing his thing as Capital Properties and I was doing my thing as Centric. And it’s quite lonely on your own and it’s quite, you know, you can ask other people’s opinion as to whether or not you should make an investment in a development or you should purchase a building or some land but unless someone has really got the same interest as you and they’ve got their money invested, it’s, you never quite get the honest opinion but I was able to ask Adam about things and he would ask me about stuff and we kind of informally worked together over time and then we looked at doing some things together and we both had similar interests in architecture and energy efficiency and social value so, over time kind of accidently merged together and started to work together and that’s where the name, Capital & Centric, comes from, it’s the, a combination of the two names because neither wanted the other to seem as though one had bought the other out or that one didn’t exist anymore, so we just kept them both, you know, rather than you know it’s the easiest compromise and Adam is ten years older than me as well so, it was really, it’s always been great throughout the whole time to have Adam there alongside to keep his, he’s a really sort of, he is a detail guy and he’s great at numbers, great at law and contracts, I’m terrible at it, and so that, that combination of the two has been really good you know, he allows me to go off and do stuff that might be a bit more creative but he also knows when to say, “No, stop Tim, that’s a bad idea, that’s not going to work”, so he’s definitely saved me from going bust two or three times with that. And we worked together informally on some big projects and it was only really in the past few years that we kind of formalised it legally, of course we’d been working together for over a decade actually as Cap & Centric but it was only really in more recent years when the numbers got ridiculously large that we thought, actually we do need some sort of legal agreement that sets out how all this works. But that’s really nice isn’t it that you can get so far in that sort of informal arrangement.
Susan Freeman
It’s really good and it sounds as if you really complement each other. And when you started as a developer, what was your vision because I know that you are very much a social impact developer but was that how you saw it when you started off?
Tim Heatley
I don’t think I did at all, you know, it’s that thing about you’ve got to do the right thing and do the thing right and that’s always been important so I don’t think we ever sort of stood back and looked at it from a social impact developer point of view and I’m surrounded now by lots of social impact and social value developers because it seems to some, to some they just put a sticker on the side and say that’s what we are, I’m encouraged to see that there are more social impact developers appearing and popping up, I think that we need to, that we need more authentic ones as well and we need, and I think that’s the case for us that really we were doing, doing it before we realised we were doing it and because we were doing things that we wanted our kids to be proud of, we were doing things that wanted us to feel better about how we’re using the access to the funds that we had and that we’ve got and I think that we also understood that if you create places and spaces that improve the society around you, it’s good for business as well and that’s one of the things that I’m always keen to point out that we’re not just here as happy-clappy do-gooders, you know we do have to make a profit and that is really important and that if you do the right kind of project in the right way that focusses on how you are creating long-term generational, social improvement and aiding social mobility that it is better for commerce.
Susan Freeman
Yeah, it makes sense doesn’t it. And, I mean, people talk about how you, you know how you measure social impact, I mean hearing you talk about it, it doesn't sound complicated because you are creating jobs, you are creating places that people want to be in and they want to come to but how do you go about measuring it?
Tim Heatley
Well, one of the first things we say is that you shouldn’t need to see a report to be able to assess has it had a positive social impact on an area, you should be able to go and feel it in a place, that’s really important and so for a long time that was the overarching thing, does an area and location and an entire place, do you notice the positive effect that you’ve had and that’s lots of different things from, you know, can you see signs of deprivation in and around it, it’s one of the really obvious things and so, but then of course over time as our projects have got bigger and the funds and the institutions have moved towards focussing social value, we’ve had to be able to demonstrate it, so we have had to commission reports and assess the social value in terms of pounds and pence. It’s a really odd thing to do in a way, it’s very hard to do as well and still actually I think it still isn’t perfect, it’s very imperfect to try and quantify social value, which is a good wrap back to the start again which is what you need to be able to do is you need to do it authentically and you need to do it in such a way that you shouldn’t have to measure it to see it. So, overtime I think the metrics for measuring social impact and social value are getting better but there’s still quite a long way to go, again I think a lot of the funds and institutions that have moved in that direction because that’s where their deposit holders want their funds to go, I think they’re still learning too, I think that they are some of it has been branding and a bit of social value washing, if you like, as opposed to greenwashing. So, that’s getting better all the time and so, as I was saying, the good… the money always follows a good idea, you know, creating positive social value is a great idea and the moneys are now starting to flock and follow to it, for a long time it felt as though we were, it was an uphill struggle and it was, we were fighting against, I think we were probably scaring money off because they didn’t understand like well why is that important to focus on, you know, lots of different things which is why it’s important to create jobs in areas where there’s high levels of unemployment and deprivation. Why is it important to have award-winning, exemplary architecture that’s democratically kind of accessible to everybody? Why is it important to create homes for owner-occupiers as opposed to offering them up entirely up to buy to let investors? You know, why is it important to have things that super energy efficient? They were just, at the time when we were pushing all of this, they were saying well what’s most important is that you make THE most money and that oblique route to the profit, you know, has taken time for them to understand that doing it in that way has, it can yield better profit and actually, a bigger customer base, you know, a better society that you can continue to develop property for so, they’ve got there now but there’s still quite a lot of catching up.
Susan Freeman
One of the points that came up in the Manctopia programme was the question of affordability and affordable homes and I mean we’ve talked about this and I hadn’t appreciated that in Manchester, in the city centre, there wasn’t a requirement for affordable housing because if you build, you know, in London there is a requirement for the developer to have you know a percentage of affordable housing. So, how do you, how do you create homes for you know people that can’t afford sort of market rent or sort of market price?
Tim Heatley
That’s right, so in the city centre which is where a lot of our projects, you know, our focus was at the time, of course we’re in lots of different cities now but at that point in time, the policy of the city was we rather you spend it on the public realm and the architecture and everything else because we can provide affordable homes beyond the city boundaries where we get more bang for our buck. So, that’s changed now of course in Manchester, there’s a big focus on getting affordable homes into the centre of it but you were actively kind of almost discouraged from doing it in the past and I think that surprised a lot of people but that’s the fact of the matter. So, what we then started to do was to look to the suburbs and you often get that doughnut of deprivation beyond the city core but then, and beyond that in the towns but surround Manchester for example, they’re often the last places to benefit from a boom and the first places to suffer from a recession so, they have a very limited window within which they get investment and regeneration so we stated to focus on those kind of places outside the city core, in the towns that surround it such as Wigan and Stockport and Bolton and say, well actually, if the transport connections are good, if we were to develop and create and deliver a exemplary projects in these towns, which is essentially just the same as the city centre projects that we do that win RIBA awards for example and are known for their popularity in terms of the food and drinks and restaurants and bars that populate them, if we could do that in the, in the deprived suburb for example but where the rent is half the cost of the city centre but the quality of architecture, the quality of place, the public realm and everything is just as good, wouldn’t that be interesting and that’s what we’re doing at the moment, that’s our major focus at the moment, is in those places and I think that as people, you know, as they’re in the city centre, eventually, they flip into, you know, they might couple up, they might go into family mode, they might want more outside space, they might want better access to early years education and green space and so on, they do head out of the city core and we’re hopefully there to offer them something as an alternative from the housebuilders kind of Noddy boxes that they build, you know, the stuff that we do in is far different from that and I think it’s a massive gap in the market and something that we’re really excited about.
Susan Freeman
And I think you’ve tried, I don’t know whether you’ve succeeded to build 100% affordable scheme. Is that something that you’ve been able to do?
Tim Heatley
We’re still trying at the moment, so exactly the conversations because in order to do that you’ve got to bring a lot of different people together so, the city council, often the combined authority in that location, Homes England and of course they all have to have their structures and their policies and so, when we come forward as a private developer saying oh well look, we’re prepared not to make a developer’s return and deliver a 100% affordable project but we will need some support from everybody else in order for that to happen, we don’t fit in a particular box and that’s the challenge. So, hopefully, over time that will change but right now we’re still trying to work our way through how we get into the right boxes at the same time so that everyone can get on the same page and we can do a 100% affordable scheme which would be, you know, over a hundred homes in a city centre.
Susan Freeman
Yeah, I mean just sort of thinking as you’re saying that, you know we keep talking about the housing crisis and we’ve been talking about housing crisis for you know I don’t know how many years now, you know, if you’re working on you know this sort of scheme, I mean do you have thoughts about you know how we should be tackling the housing crisis and in fact, whether it is the developer who should be responsible for providing the affordable housing?
Tim Heatley
Well, yeah, you’re right, it’s been many decades and we’re still in the same infinity loop of failure because essentially, when you try to force the private sector to deliver the houses, it certainly hasn’t worked has it? I think the big issue is that there is room for negotiation or there’s grey areas on affordable housing in a lot of places and so that means that when a developer is trying to buy sites, you know, we don’t know if our competitor assumes that there’s going to be no affordable housing but we assume there’s going to be 20% affordable housing but we’re never going to be able to buy any land or sites so, I think a big move that would make a lot of sense would be to have a national policy, it could be postcode based, you know, we have HMRC have a deprived wards, you know, postcode based system, you could use the same approach to establish where you need affordable housing and what that percentage is so it’s fixed, so that when acquiring sites for development there is no grey area and no wriggle room because if a developer is negotiating with a planner then the developer is probably going to prove the argument and they can stand there and say well, if you don’t give us a consent, you don’t get the growth, you don’t get the regeneration, you don’t get the investment so, that then means that the planners on the… they’ve got a very blunt tool, all they can is no to something and then probably get over ridden down the line. So, I think that would help to kind of like dismantle that and you don’t really see it in any other sector do you, you don’t see it where you have to have you know electricity companies being told that they must provide a certain amount at a discount to market value or you don’t get told that food stores have to provide a discount to open market value or car manufacturers. It’s a strange thing to just pick on property a sense and say that’s how we’re going to solve the issue, it’s not really the way, it’s not really worked and we’re not passing the buck. I think you’ll find a lot of developers are happy to deliver affordable housing but it has to be on a level playing field and it has to have, it has to be consistent and has to have clarity and transparency in order for it to make a difference.
Susan Freeman
Yes, it certainly doesn’t seem to be working terribly well at the moment and I mean it seemed to work when the local authorities actually built you know council housing, social housing but with the constraints on local authority budgets now, I mean I just don’t see how that happens.
Tim Heatley
No, I think that, I mean successive governments have neglected it haven’t they and they haven’t given the resources to the organisations that can help as well centrally, they need to help Homes England more for example, I think they need to support it more and I wonder, and I have to say successive governments but I do think that that might change if we have a new government in place, I think that they seem to be focussed on affordable housing at scale and I think that we will see a big shift and I think there’s opportunity there for private developers to be a part of that as well in order to deliver affordable homes because local authorities won’t be able to do it all on their own so, I think we’ve got an exciting horizon, you know, coming up and so, I think we’ll see some big changes over the next five years.
Susan Freeman
Yeah, we’ve been talking about local authorities and you know your many schemes must have a lot of situations where you’re working in partnership with local authorities and I mean do you find that there’s you know a real difference between working with the local authority and is trust an issue because that’s what, you know, I hear from developers?
Tim Heatley
Yes, I mean I’m privileged that we work in different cities and different city regions so, you definitely have, you know, I get to see the difference between the good ones and the not so good ones as well, the ones that a lot of it seems to be down to confidence, self-confidence and that can depend on their, you know, on where they are in their political cycle or where they are as a local authority or a combined authority, you know where new organisations are formed and because of the projects that we do, so on average our, yeah, approximately our gross development value on each project is about £70 million on average, £70-75 million on average, our biggest to date that was completed is about, is over £200 million. Now, you can’t do that in isolation, you need to have the council on board and increasingly now, councils have combined authorities on board and often we’re in areas where there’s high levels of deprivation so, we need other levels of public sector gap funding perhaps, so Homes England are then in the loop and in the past, in recent past as well, we’ve had great support from Delook, you know Levelling Up and so on, so it’s a huge collaborative effort and we get the praise and the plaudits as the developer as Capital & Centric but I think a lot more of it really deserves to go to the likes of Homes England and Delook and the local authorities that we work with because it just simply wouldn’t be possible without their support and encouragement and funding and assistance in getting big change to happen and they’ve got to back us in a big way and that is tough to back a private sector developers because developers haven’t got the best reputation. I think that’s improving, I think that’s changing, I think that demonstrating that there are developers that will focus on social value as a key metric, is making the relationships better with the public, with you know these local authorities and combined authorities but there is a huge difference, yeah there absolutely is, there’s in some places there’s a huge lack of trust because some of it is fairly, you know, normal what we’re doing in terms of you know improving the fabric of the place around us and aiding social mobility but in new places that we go to, that’s, they’ve not heard of that before because it might be that the local development organisations that they’ve worked with are a bit more smash and grab, a bit of a drive-by sort of, a drive-by shooting style development and that builds a huge amount of distrust. So, when they learn that, because we’re as much an operator as we are a developer, we tend to acquire, develop, retain and hold as long-term investments. We can take a long-term view of value and of rental growth and so, they’re not used to that so there is kind of an educational kind of bit to do with some public sector partners as to how we go and that’s when national organisations like Homes England are brilliant because they are able to say actually, we have worked with Capital & Centric before, we have worked with Developer X, Y and Z before, they can do this, we have done it before and there is a model for it because no-one often in the public sector likes to pioneer, you know, if something goes wrong and the reason was because you tried something radical and new, it's never a good look so, if we can demonstrate well we’ve done it before and it works, that helps a lot.
Susan Freeman
Yeah, the points you raised about you know radical and new, I think you know real estate is not terribly good at innovating, people feel safer with you know what’s tried and tested so, the opportunities to experiment actually are quite limited aren’t they.
Tim Heatley
That’s what I find so fascinating and exciting about the industry that we’re in though because it is that rearview mirror mentality so often, it just means that, that you don’t have to almost try too hard to do something that can be perceived to be quite groundbreaking or quite radical so, so I find that really exciting and for a long time a lot of the things that we’ve done and how we do it, I kind of pinch myself and look behind me to see well they must have lots of other people that are doing the same thing but I find that they take are while to catch up but I think that’s a generational thing, I think it’s getting better, I see a new breed of developer coming through as well that seems to get that there are better and other ways of doing it that mean that you can do more, you can go faster, you can deliver greater, instantly profitable, it doesn’t have to be an argument with the planner, so one of the first things that we do is we turn up and if we’re investing in a new place or city we find out what are your priorities, what do you want to see developed and what sort of, what do you want? And we do that, we focus on that and surprise, surprise, you get through the process quicker so, that I think is really encouraging to see as you kind of lack, yeah as time goes by, that’s getting better and that’s great to see other organisations that will, yeah, that are challenging the norm and come up with new, pushing the boundary on architecture, pushing the boundary on energy efficiency, we’re seeing some great stuff around building re-use, new tenures as well, you know, new sort of types of workspace and home space, I think all that is great because it gives us a new thing to do, you need that, as any industry needs that, you can’t stagnate and do the same thing all the time because the consumer gets bored, so we’re always looking, you know, for innovative new ideas and ways to persuade people to move, to relocate, to be it their business or be it their restaurant, their bar, their office or their home.
Susan Freeman
Yes, and we’ll talk about some of your projects and I just wanted to mention, in terms of you know doing things differently, I think it was at Crusader Mill, you offered first dibs for Manchester and you I think said that you wouldn’t be selling to, you know, investors and it was going to go to local people who were going to live there, I mean how did you manage to do that?
Tim Heatley
Well, it’s weird isn’t it that that was seen as being pioneering even though it’s doing what housebuilders used to do for decades, which was you sell a home to somebody who wants to live in it but it’s less about it being to people that had to be Mancunians or foreigners or whatever, we want everybody from wherever they are in the world to live in our development but, but they had to live in it, if you wanted to buy it, that had to be them, for their home, we didn’t want it to be an investment asset and we were surprised at how unusual that seemed to be as a concept and I remember The Guardian writing about it and saying you know they have to have a dig because we’re a property company obviously, so they had to do that but they said something like, they called it a gimmick but I think they thought that we were only going to sell maybe or 10 or 20 but we did it with over a couple of hundred homes, all of them in fact, we said look, unless you are going to live in this home and unless you’re going to be part of a community, then you cannot buy here and so, we had to, and there’s a balance you know so they could theoretically, after they’ve lived in it, they could sell it, you know, they have to be a mortgageable asset, so there’s lots of work and there’s lots of paperwork to go through and there’s lots of checks and balances that we needed to do but we were able to successfully prevent investors buying it, fundamentally it probably wasn’t, it wasn’t an appealing asset, a project to an investor either because our home owner apartments in Capital & Centric projects are always larger on average, 30 to 40% larger than in that locality because we’re trying to ensure that the residents want to stay there long-term and so that was, yeah it was a really interesting thing to do and we learnt lots from doing that as well because when you move an entire community into a place and they’re all owner occupiers, they’ve very much got a very high kind of vested interest in the success of that place but also, before they’ve moved in we’d get them together for activities, drinks, dos, dinner parties, you know, we’d put them on for the residents and of course that means that you know there’ll also on WhatsApp groups and Facebook pages and so if something wasn’t quite right and still now actually, still is the case that if something isn’t quite to their liking, they’ll complain en masse, which is, which is you know a bigger challenge but that warms hearts to see that there’s a proper community there that functions, that cares about the place and the immediate surrounding area and that particular project was in an area of antisocial behaviour and crime, it was known as a red light district and so it really needed a, the community to be the beneficiary because, you know, they’re moving to that place, they’re making it better, the values go up, they’ve got a few quid in their pockets as a result and they spend it in that locality and it becomes a big cycling process and they pick up the litter as they pass it or if they see anything that’s, that’s criminal activity or antisocial behaviour, they report it because it’s their home and they care and you don’t get that quite as much with an entirely transient kind of rented population to the same extent, especially when the ownership of those apartments are fractional, where there’s 150 people that own 150 apartments, there’s no one, singular voice that’s leading the march for improvement and change in a place or a building so, so we do one of two things, we either sell to owner occupiers or we retain them entirely as one investment ourselves and operate them as a good landlord.
Susan Freeman
Okay, so you’ve got some rental property as well as the for sale?
Tim Heatley
Yeah, increasingly, we probably have a couple of thousand homes under development at the moment and increasingly that will be for rent but retained by us, so you still can’t buy off us, if you’re a buy to let investor I’m afraid you can’t buy off us, we’ve never, we’ve never sold them to buy to let investors and we never will I’m afraid.
Susan Freeman
So, I think what would be you know really useful is maybe to talk about a couple of your projects, obviously there are so many so I’m going to leave it to you to talk about, you know, the ones that you are most excited about.
Tim Heatley
Crikey, where do you start? So, I think we have eight live construction sites at the moment so that’s a challenge but you know and we’re across different asset classes as well so, we’re talking about apartments, those sorts of homes but increasingly we’re building suburban homes, we have a site in Farnworth where we’ve got, which is in Bolton, suburb of Manchester and we’re building suburban homes there, including over a hundred homes in the town centre of Farnworth and I’m really excited about that because it was a former 1960’s parade and it was derelict and it’s our ability to entirely renew the town centre there, over a hundred homes including zero carbon homes as well, that’s great and a lot of people said they didn’t think it’d happen ever and that’s really nice to prove the critics wrong and so, that excites me. I mean I’m always excited about the next project, it’s you know, it’s always the way isn’t it, that’s the one that really gets us out of bed in the morning. We’re building film and television studios in Liverpool, that’s underway at the moment.
Susan Freeman
I saw that, that’s the Littlewoods building isn’t it.
Tim Heatley
Yes, yeah that’s right, yeah. And in Sheffield we’ve just acquired a huge brewery for over, probably over 500 homes there but lots of other things around it as well so, you know, you can imagine restaurants, café, bars, public squares, pocket parks and so on and that’s a new, emerging part of Sheffield as a city as well, it’s a place called Neepsend and so that’s exciting because that’s ability to kind of start to shape a new, entire part of a city, in a similar way that we did with Kampus, which is next to Piccadilly train station in Manchester, where there’s over 500 homes there but lots of great and really well thought of restaurants and bars as well so, so it’s always kind of learning lessons and then moving onto the, you know, applying those on the next place, but increasing the suburban homes, you know, we’ve got lots of suburban homes under our Neighbourhood brand, it’s Neighbourhood by Capital & Centric and lots of lessons learnt from our you know higher rise, higher density apartment developments we’re applying to the suburbs as well and so that’s really exciting because I think again, the house builders are big and sleepy and super successful and what they do works really well, why would they need to change and then that’s great for us because it leaves a massive gap in terms of doing things better architecturally in a place, putting events and activities on, all the lessons that we’ve learned in city and town centres and apply them in the suburbs and that allows to steal a bit of a march on those, some of the housebuilders and eventually they’ll see what we do and they’ll do their version of that but, you know, by that point we’ll have plenty under our belt.
Susan Freeman
And you’ll probably have moved onto the next thing.
Tim Heatley
Hopefully, yes, whatever that might be.
Susan Freeman
When you’re successful in you know creating these new communities and regenerating city centres, I mean how do you deal with gentrification because the more successful you are and the more people want to be you know in the area, the more prices go up, it becomes more attractive and then it loses the original grittiness doesn’t it.
Tim Heatley
It does. It’s a strange one because the cycle I tend to on is, the process we go on is, we announce that we’re going to do something in a place like for example Stoke on Trent and then lots of people say well that won’t happen and that’ll never work and that’s a terrible idea and then you do it and you deliver it and people, the critics go quiet but then you know that you’ve been really successful as a project when the critics come back but this time the critics are saying well, the problem is, of course that you’re attracting too many people to this area and now the prices are going up and the rents are going up and all the derelict houses have now been repurposed and re-used and now they’re full and now it’s expensive. And I kind of don’t know when regeneration stops and gentrification starts, I don’t know if I’ll ever know that. What we do often, we say is we are demand creators so, our job is to create demand, our job is to find you know places where demand isn’t seen to exist and find a way of making it exist and we do that through TV shows that we spoke about and making sure we’re in the Sunday Times, you know, next best places to live and we can do that with, you know we have a huge, I mean our social media and marketing team is as big as our development team, it’s crazy, I walk in there, we do all of our video production team are there and but we’re influencing human behaviour and we’re interested in that, what makes people tick and how they think and how we can encourage them to look at new places to live and to work and to hang out and so, I think that we definitely don’t have the answer in terms of where do you stop and when does gentrification start but things like ensuring that we’ve got the right sort of independent café bars and operators in that space is really important. One thing that we’ve learnt as well is, keeping our rents low helps a lot, especially in the commercial spaces as well and doing a lot more on fit out for these different places, you know, for the businesses that are going to locate there, helps a huge amount as well and that’s really important to us as well, it’s great, that’s great for business because you know if you look at, you know, I think there’s a McKinsey report and when people buy a coffee, 70% of it is about the experience that they have with the barrister and only 30% of it is how good the coffee is and if you’ve got an independent café bar, what’s really important to that independent operator, you know to pay their mortgage, that they offer a great experience to their customer and that’s why, to us, working with independents is a real focus because they experience that they can offer is far greater than that of a national chain but of course to have the independents there you can’t be charging huge rents and it’s working out where do you get the value from because with the right mixed use of space and the right public realm and the right energy in that environment, somebody will have to pay a rent in order for that to work and it’s often the apartments above or the homes around it, so I think that you know for us, especially with the locations that we’re in, we’re often a long way off gentrification, it’s often can you build anything here, can you get anything to work here, let alone that so, I think for us, our job is to raise the bar, raise the quality, encourage other investors and developers to follow us in and hopefully leave it for, you know, the generation five and ten years after to think about well how do we prevent gentrification from occurring.
Susan Freeman
Good answer, I like that. So, your work has, I mean, starting in Manchester, you’re now moving out to you know other locations and cities, does moving further south sort of appear on your agenda?
Tim Heatley
Yeah, I’d love to because we’re up in the North, you know quite a way up north, up in the north-east if you like and in that part of the world and, and then we’re down in the Midlands, you know so we’re in like Wolverhampton for example, we’ve announced a huge project there with Wolverhampton City Council and we’d love to go further south as well. I suppose it’s just waiting for an opportunity. I kind of always assumed that it was the south and therefore it didn’t need us, it didn’t need demand creators and it didn't need our approach but I’m increasingly hearing from others to say oh you know what, it would be great if you did that, you know, down south and in some of these places and I suppose I’ve not really got any knowledge or particular relationships there, obviously I spend quite a bit of time in the city, in London, but beyond that I don’t really know much about other places so, yeah, we’d really like to be in other cities and other large towns, yeah, in the south.
Susan Freeman
Yeah, there’s certainly you know a number of deprived areas around London, I think everybody assumes that you know London is you know successful, people have money but there’s, there’s a lot to do in London. So, we haven’t even talked about your charitable initiatives yet, I mean the one that I’m particularly impressed by is Regeneration Brainery and I have to say I heard so much about it, I didn’t realise that you’d started that charity, so I think having seen some Regeneration – are they Brainies? – around MIPIM, they were I think wearing bright pink tracksuit tops. Can you tell our listeners a little bit about the charity and why, why you started it and what it does?
Tim Heatley
Yeah, well I can’t take the credit because I was in the privileged position whereby I can, you know when you have a little bit of a good idea and also you have a little bit of money to get a good idea started so, that sort of felt like well, I can help a little bit here. The idea came because when we’ve grown as a business and we’re recruiting new people and we noticed that the demographic was all very similar and that the people that were in our industry were, you know, had a very male dominated, white, middleclass, and that’s great and fine but in the long-term isn’t great for our industry and that’s nobody’s fault either, you know it’s nobody’s fault that things are like that, it’s just over time generationally if you like what one generation said, tell you what, property is great, real estate is great, you know, be involved in that and so what we could have done is gone, well shrugged our shoulders and say well that’s what we’re presented with as the candidates and what can you do but we thought well, first of all, let’s recruit somebody, so we did that but also what can we do to ensure that in the future there’s a broader demographic and that there’s a wider talent base and we’ve got more people who we’re able to call upon for their experiences because of course a lot of the locations that we’re developing are very different in terms of their demographic, they’re not, very much not white middleclass men, so we wanted people who have walked in those shoes and from that background and understand the challenges of those towns and cities that we’re working in, to help us create a better product and to help to create, yeah, a better place, so it’s good for business and I keep making this point about, about the non-profit stuff that we’ve been involved in. If you make it good for business then business can you know lean into it a lot and support it a lot and be better as a result, so yeah, we started this programme and it’s, it uses mentoring and we crowd source mentoring and support from across the industry and we go into schools and colleges and we tell people about the real estate sector, it's not about construction, it’s more about project management and architecture and design and so on and property development and finance and marketing and interior design because we want the most talented and diverse people in our sector, not in somebody else’s sector, we want to be the beneficiaries of that don’t we, and we’re supported in, the reason I can’t take the credit is it’s the all the businesses and partners that have supported us in doing that, so whilst I started it, it’s actually been taken on by the industry, I’ve, I’m no longer anywhere near involved as I once was because the industry has taken it on which is incredible to see and we’ve got brilliant property companies like Land Securities, Bruntwood and loads of other property development companies that have backed and supported it but also architecture practices, law firms, project management and you know surveying organisations, CBRE, Avison Young and so on. So, that’s allowed it to big, it’s working with a few thousand people across the UK every year and we’re getting them work experience as well, then getting them employment, so it’s the whole cycle through from kind of education to higher education, right the way through back into the industry and what a great thing to see, you know, to see people out in Cannes and MIPIM and they’ll be at UK REiiF and we learn loads from them, these people because you know, what they know about what works in a place that we don’t know, is amazing, so it’s great for us.
Susan Freeman
No, it sounds fantastic because it’s something you know we talk about a lot, the image of the industry, how do we get people you know who think differently, come from different backgrounds, to get as enthused about you know the built environment as we are, so that’s terrific and I think you’re also the Chair of the Greater Manchester Mayor’s Homelessness Charity which I think has been pretty successful in fundraising.
Tim Heatley
Yeah, again it’s a similar point which is, it’s better for our city region so our Mayor is Andy Burnham, he’s the Metro Mayor, and so he’s got lots of things that he’s involved in over time but as he started off, his big thing was to reduce homelessness so, and so that’s how I got involved at the time with Andy to say look, we’ve got some property that we could repurpose as homeless provision and then that led onto needing to form a charity and then once we formed the charity, we had a huge amount of support from businesses in the Greater Manchester area, I think we’ve raised £4 million in four years I think is what we’ve raised to the focus on, our flagship initiative is A Bed Every Night so that there is a bed and there’s mental health and physical health support and a hot shower and a hot meal for every single person that is sleeping rough on the streets of Greater Manchester and so that’s the primary purpose of the fund but we also have lots of other initiatives and activities as well but often working with existing organisations out there that on the front line that are doing great things to reduce homelessness and rough sleeping as well so, it’s really rewarding to be part of it, especially when you’ve got lots of businesses being so supportive and giving so much to help and we know it’s had a combined sort of approach from private and public sector, you know so, support from the Ambulance Service and the NHS and the police and other organisations that collaboratively have come together to find solutions to reduce homelessness and rough sleeping in the city. There’s still lots more to do, you know, things that are happening centrally mean that we’re seeing more people presenting as homeless in the city region, so there’s a lot of pressure on it at the moment as well but yeah, we’ll keep moving forwards.
Susan Freeman
Yeah, that’s great and I think you must have a particular talent for fundraising, I think you are very good at this.
Tim Heatley
I think that’s, it’s spotting a good idea and then explaining that to business as to why it’s good for them as well so, you know, businesses like solutions, they don’t like to keep chucking money at something that’s a problem because you know they like to, they like final solutions, things that are more like how are we going to prevent this from recurring in the future, so that’s where you know we’ve helped co-found a charity called Embassy, which started off us buying a bus, converting it into a homeless shelter and that was seen as being a really useful sort of way to get people off the streets but help them to learn to cook and to clean and to budget and to get a job so that it wasn’t dependent upon Government, you know moving forwards, it didn’t need benefits, it didn’t need housing allowance, it meant that they were entirely independent and then I noticed how powerful that was to businesses when the businesses said yeah, brilliant, because we don’t want to keep having to tip in, if you can get somebody to be self, you know independent and not reliant upon the Government then that’s something that we can support and that charity has now evolved into us building 40 homes in the centre of Manchester for people who are at risk of homelessness or that are homeless so, we’ve evolved from the bus into actual studio apartments, 40 studio apartments, which is a private, entirely privately funded in donations because businesses can see that if we can keep cycling through people through the Embassy village in Castlefield, if you can keep cycling people through, teaching them to cook, clean, budget, get a job, it means it’s a long-term, sustainable way of reducing homelessness and making our city more attractive for people to come and live in, which is great for property development and investment, making our city more attractive to work in and study in because it’s, it has less deprivation and crime and antisocial behaviour so businesses can see the positives in that and it’s really important to communicate that if you want to raise funds and get big support.
Susan Freeman
The point you make about you know being somebody that finds solutions, I think is a theme that runs through you know everything that we’ve talked about because I think people just get frustrated don’t they, sort of endlessly hearing about a problem like the housing crisis but nobody’s coming up with solutions, so I think it’s a very key talent.
Tim Heatley
Yeah, well I think I can’t take credit for that but the people that I you know hang around or whatever it is, I think I’m gravitated towards people that have got a creative way of thinking, I’ve always enjoyed that, that’s what I said at the start of the podcast, a lot of my mates at uni were art students and I like that, I like the, that, there’s a magical combination between getting people who, creative people often aren’t good at money and finance and then plugging that bit in for them to go well don’t worry about the money and finance and how those numbers work and we can sort that, you just do your good thing and you come up with your great ideas and let us find a way to collaborate, it’s such an exciting space to be in. I’ve definitely always felt like I was on the creative spectrum as opposed to the academic spectrum but I did the academic thing because I thought that that was the way to money and money was the way to independence but you know so I tell my kids now, I’ve got four of them, that that isn’t the way to go necessarily, you know you need to have a really good balance between academic ability and creative ability as well because that’s where the success lies, I’m sure.
Susan Freeman
And has anybody been a role model or inspiration to you?
Tim Heatley
Well, tricky one. I mean certainly, I’ve been, I mean I’ve been fortunate, growing up in Manchester and I’m from Salford but seeing all the development and change that’s happened in Manchester has been incredible so, and so there are great property companies that I have huge respect and admiration for that have done it so well that to me, it just felt like that that, it meant that what I had to do there was second nature because I’ve seen it done so well by those companies so, in no particular order, Bruntwood, a big workspace provider, offices and so on, they’re incredible and do a lot from a social perspective as well, family owned. Privately owned, long-term view of what they do, Urban Splash, great on architecture and design and branding as well, fantastic. There’s a company called AST who do, have done some really cool leisure and restaurant spaces in Manchester so, so many, Manchester based property companies that have done really cool stuff and so they’ve definitely been, those organisations and the people that run them have definitely been people that I admired growing up and so, yeah, I’d say they’re, they’re the key people. But probably actually, my grandparents, you know, Irish immigrants, came over here with a couple of suitcases from farming backgrounds and met each other while they were in, when they arrived in Manchester and that ability to go from nothing to create something, to create a life and to take a challenge and to be brave and to see what’s over the next hill and give it a go and risk losing it all and being prepared to go again, I’d probably say my grandparents would be the biggest inspiration in my life, yeah.
Susan Freeman
That’s great and we have UK REiiF coming up shortly in Leeds and it’s become, I mean I think it’s year three and it’s become, you know, overall success and MIPIM UK tried over a number of years, you know, to replicate MIPIM in London and I, I just wondered if you had any thoughts as to why UK REiiF has really resonated with people and I think they’re expecting about 12,000 delegates this year.
Tim Heatley
It’s incredible isn’t it and the timing couldn’t have been better and I think UK REiiF in fairness, if you speak to the built environment team and the people like you know Ketih and his colleagues as well that started it, I think that that was a really sort of luck, it’s a bit of all or nothing here, you know, because I think that they were struggling because of Covid and it meant that the events they were putting on were less well attended and they put it all on black and thankfully and brilliantly, they got it right and that meant that post-Covid, people weren’t necessarily going out to Cannes or flying away as much as they were and so that was great and it was sunny as well, it was a sunny day for a few days in Leeds, that makes a massive difference as well, it helps a huge amount and often so much of what is done in the property world is you know, UK based businesses working with each other and I think that we definitely needed to have a stage on you know, we definitely need a world stage, so there’s always a place for MIPIM and Cannes, I think it’s really important that the UK is represented there on the world stage because we’ve always been a huge place for international investment but I think because of that track record of international investment in the UK, they often have UK offices and they have UK colleagues so that means that you can meet in, at a UK REiiF in Leeds and you still have the international representation there, albeit from the UK arm of that international organisation so that, yeah, has meant it has been incredibly successful but I think the other great thing about them is that they’ve been very inclusive about it’s accessible isn’t it, it’s accessible to, for example, they’ve put their arms around Regeneration Brainery, year one, and gave the Regeneration Brainery crew and Brainies, you know as many free spaces as they wanted to bring young people along to that, to see what the real estate sector is all about and that’s invaluable and they’ve done that with lots of other organisations and non-profits and so, I think helped a lot because they’ve just said it’s you know come on, come all and that’s again proof that if you do more than just sit there and think well I’ll just, I’ll charge a fortune for tickets and I’ll only let the people that are senior come, just shows actually that if you don’t take that approach and you let everybody get involved and you’re seen to help a much more wider demographic of people into the sector that actually everyone responds really positively to that and I want to help UK REiiF because they’ve helped me, you know, for example, and I’m sure that’ll be the case across lots of different businesses and individuals.
Susan Freeman
Now that’s terrific, well let’s hope for more sunny weather this year.
Tim Heatley
Yeah, absolutely. I’ll get my shades ready.
Susan Freeman
Tim, thank you so much, that was great, it was lovely to talk to you.
Tim Heatley
Thank you, it’s been good fun.
Susan Freeman
Thank you, Tim, that was terrific. Carry on disrupting and being a trailblazer for social impact development and I look forward to catching up with you at UK REiiF in Leeds very soon. 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.
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