Businesses don’t have to ‘flat’line during uncertain times
With the political and economic uncertainty around Brexit, you could forgive the construction industry for being apprehensive about committing to investing in growth areas over the coming years. But fortune favours the brave and one area of the housing market that is currently showing real recovery is the rise of the private developer market for flatted developments.
At Hart Builders, we spotted this emerging trend and invested heavily into our business to allow us to move into this area. Taking this risk is really starting to pay off. In fact, developing this new market has resulted in a seismic shift in our business, where we have almost doubled our turnover in the last two years alone.
Previously Hart Builders, part of the Cruden Group, had carved out a solid reputation for delivering affordable housing, in partnership with local authorities and housing associations, with approximately 80 percent of our business coming from the public sector. Together, with Cruden Homes, we as a group have the ability to secure land, fund developments and deliver large construction projects, which sets us apart from many of our competitors.
Now, the portfolio of our business has shifted and while the number of affordable housing projects continues to see steady growth, by seizing the opportunity to work with a range of private sector partners and deliver developments for sale and private rent, this is now accounting for almost half of our business.
The majority of this development is in the transformation of Leith and the Waterfront area of the capital, an area not unknown to Hart Builders. In fact, we were one of the first developers in the area to identify the land opportunities and negotiate deals with commissioners and funders to ensure much-needed development continued during what was an incredibly challenging period for the construction industry after the economic downturn.
Building on these firm foundations, we continue to play a vital role in the transformation of these brownfield sites to provide much-needed flatted housing developments, together with delivering a substantial economic boost to the local community and regenerating derelict land to transform the image and desirability of these areas.
Now, with the population of Edinburgh projected to grow by 7.7% by 2026, and with the number of households likely to grow by 11.5% over the same period, it is clear that demand for housing in this area is set to continue unabated.
Working with partners including the City of Edinburgh Council, Forth Ports, Rettie and the Teague Group, we are currently building 750 homes in Edinburgh, but in order to meet the needs of Edinburgh’s growing population, we have set a target of delivering 1,000 units each year from 2020 and have structured our business to deliver this.
The investments we have made over the last year, in building a highly skilled technical services team and sustaining our long-standing direct labour workforce, have been instrumental in delivering significant turnover growth and supercharging our business.
But it’s not just about business growth. These developments are meeting consumer demand for apartment living as the rise in popularity of city centres as a place to live and work continues to grow.
Attracted by the proximity to shops, restaurants, leisure and cultural amenities and facilities on their doorsteps, city centre living also offers an attractive work/life balance with reduced commuting and greater choice in mode of transport.
The transformation of large brownfield sites enhances and improves the quality of life for residents and acts as a catalyst for creating new, sustainable communities. The development of public green spaces in these new residential areas will bring benefits to the community and neighbourhood, creating multi-use open recreational areas for a variety of leisure activities and welcoming places for residents to socialise and interact. The Council decision to approve the expansion of the Tram network to Newhaven, further enhances the benefits of living in these new communities as they grow and thrive.
Being nimble, responsive, and quick to identify new growth opportunities, has delivered great success for Hart Builders. With a strong pipeline of flatted developments, and continuing high consumer demand for quality apartments, I’m optimistic about our ability to respond to changing consumer demands and meeting the growing housing needs of the capital’s population.
Andy Mallice is Managing Director of Hart Builders, part of the Cruden Group