London developers are starting to ask the question: "Who is London Town?" as the profile of the company rises in the capital. Last year its largest project to date, the 98-apartment scheme The Bridge in Battersea picked up a Housing Design Award, for a design undertaken in house in cooperation with Arup Associates Planning Design. That scheme is now under construction and the company will be adding to its portfolio this year with two landmark schemes that are bound to get even more attention: a 422-unit site in Wandsworth and an apartment scheme right beside Tate Modern in ever-so-trendy Bankside.
Although London Town is the name associated with the schemes, the firm's role is project manager, acting for investors - financial institutions, pension funds, syndicates and private investors. Over the past three years the firm has transformed itself from residential property developer to funds manager, insulating itself against the vicissitudes of residential property development. "The problem developers face is boom and bust. We don't want to be a victim of recession, so we prefer to be advisors to property funds," says chief executive Jonathan Buchanan.
The company's principal income is its 15% fee on project management - although it offers a range of services in-house from interior design through to portfolio management. "We draw fees on the RIBA scale, basically because we wanted something that was institutionally correct," says Buchanan. The company also puts its own money into projects. Its interim results last September showed pre-tax profit up 53% to £566 000 and £120m worth of properties under management.
The Bridge was funded by 15 investors including Baring Houston and Saunders, which recently paid more than £7m for 36 apartments there. The company's formula in making schemes attractive to investors and buyers is to make them contemporary, but not overtly so. "It is important that the product that's delivered can be lived in. Not everyone out there wants a stark loft," says Buchanan.
He admits that pension funds remain cautious about investing in residential property. "It is changing, but not as quickly as people thought. But if we keep producing the results it will escalate within a few years. We've got five good institutional clients - we would like 12 by the year end."
Happier ever after
"We endeavour to communicate effectively with you throughout our relationship, and then to deliver what we promise, 100% of the time, with a smile." Some homebuilders might feel making that kind of statement to homebuyers is asking for trouble, especially at a time when the eyes of consumers, and television programme makers, are so intently focussed on the industry. But the statement heading Miller Homes' customer care manual is backed by the input of marketing expert Malcolm Pitcher, 12 months of research and three months of trials, a six figure investment in IT, training and literature and crucially, a certification and inspection procedure for contractors.
"We've binned all the old systems and we are starting from scratch," says Philip Hogg, marketing director of Miller Homes. The customer care system is based around the fact, Hogg explains, that "the biggest cause of customer dissatisfaction is wrong information". As a result Miller dripfeeds sensible information to customers, even going so far as to warn them about the "ugly duckling stages" in the homebuilding process.
It is the kind of service approach you would expect from a US homebuilder, and Miller unashamedly draws on US best practice. Centrepiece of its new service is a manual for homebuyers called A Place To Find The Answers, 52 pages of happy-ever-after lifestyle photography and firmly practical guidance. It takes buyers through the purchase and build process, what to do when making visits to site during build, legal completion, optional extras, and what will happen after move-in, with some helpful advice on decoration and maintenance.
Accompanying the buyers' guide is a contractor manual, which opens with the same customer pledge and outlines the self-certification system Miller has introduced for its contractors, as well as Miller's subsequent inspection. Contractors' conduct during remedial works is also covered. But the objective of the system is to cut down on those remedial works. "We can identify the problem subcontractors," says Hogg. "Nail popping was actually our biggest problem, so we should spend less on aftercare because we are designing it out." "The system has highlighted the fact that you can't under-resource at site level," says Miller Homes managing director Geoff Potton. That is a lesson that Barratt and other recent targets of the TV consumer programmes have learned rather more painfully.
Better by design
Coving is the giveaway. Find it in an urban apartment and it usually means a mainstream suburban homebuilder hasn't had the nerve or the know-how to do city living in style - and of course, that it wanted to conceal the cracks. Persimmon is one volume player that has broken out of the suburban mindset with its City Developments division. It can do bed decks and sleek interiors as well as a niche urban specialist, and attract the trendy tenants to its commercial space to give its schemes that city buzz City Developments expects to notch up some 250 units this year (independent of London sites that are being badged under the new brand), and has just completed its first year of operation. "We've been much more successful than we expected," says Steve Watt, chairman and managing director. Last year the company took £11.5m in sales alone on launch weekend at Glasgow scheme 95 Morrison Street - a building it bought for £750 000. In the pipeline for 2001 are Wallace Street (below), Morrison Street's 28-unit new-build element designed by the Parr Partnership, a 59-unit new build apartment scheme in Bristol, and a major mixed use project in Maidstone to provide more than 80 000 sq ft of residential with offices and a hotel, and more.
How is the new brand successfully freeing itself from the shackles of suburbia? "We don't want a standard set of plans from architects," says Watt. "We want architects to add value. We've had to get architects to free up, but once they do that they race off." City Developments' own staff come from outside homebuilding. "It's not like housebuilding," says Watt. "It is high risk, high margin with a lot of capital tied up." The company even manages its own build projects. But he doesn't see it following other urban specialists. "The likes of Urban Splash and Sapcote are different to us. They let buyers do their own thing. We find that too messy and prefer to do more." "We're not reinventing the wheel," says Watt. Within the specialised urban market that may be true, but the approaches are very different to the mainstream, as he acknowledges when comparing his business to Persimmon's main regions. "The aim is that local offices will look over our shoulder and learn from us," he says, "because PPG3 is not going to go away."
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Building Homes
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