The Opal Property Group Legacy

Opal Property Group are hitting the Press daily/ weekly at present as more and more of their SPV development companies are being put into administration. First to fall was the Construction arm of the business, Ocon Construction. There has been speculation over Opal’s position for many months, but I have resisted commenting too much to date. Until very recently we were working with Ocon on major projects at the University of Liverpool and Loughborough University.

Stuart Wall founded Opal and over the last 25 years has built the business up to 20,000 student bedrooms, amounting to a £1bn property port-folio. They are a major player in the Student Living sector alongside Unite, UPP, Liberty Living and others. Its no secret that they have suffered major financial problems over recent years with their lending facilities. The crux of the problem is that they have fallen into a trap where their property loan to values are in excess of 100% and the banks wont support them any longer. Despite the fact that their operational business is still strong and generates a lot of annual income, probably around £100m.

I have personally, through our business, worked with Opal since 2006 and our work with them became the platform that we have built our strong student living profile on. I know Stuart personally and have built many strong business relationships with past and current Opal people. I am therefore personally saddened by recent events. I wish everyone who remains part of the business at this time the very best for the future and I hope to work with some of those people again.

chettlesSo what will become the legacy of Opal?

From my perspective I am in no doubt that my work with Opal created a personal profile for me and our business in the sector. I would even go as far as to say that my career progression can be linked to Opal. Today we work with many public and private clients in the sector and have delivered around 11,000 student bedrooms and counting. Off the back of our sector profile I have been invited to talk at the forthcoming LD Events Student Housing conference in London on the 15th May. I will therefore always owe a debt of gratitude to Opal and their people, past and present. We continue to work with a number of people with previous links to Opal, and I am a firm believer in maintaining positive relationships with everyone I do business with. Profile and reputation are both hugely important, especially in these continuing challenging times.

The big question on everyone’s mind though is what will happen to Opal going forward. They are a high profile operator of Student Accommodation. Will their 20,000 beds be sold? Who will buy them? Is there an appetite to buy them? Could this potentially devalue the asset class in some cities/ regions? I don’t know the answers to some of these questions at the moment, but it will be important to understand what the wider implications of this will be.

The Student Living sector is in a time of change. Universities fees, entry requirements and affordability are key challenges the sector faces. The International H.E. sector is growing as well which is interesting and potentially poses a risk to the UK. I met Prof. Brian Cox last week at MIPIM and he was talking about the importance of our H.E. sector, in both academia and research. I believe the government need to focus much more on the economic value of Higher Education in the UK. It should be a key component to sustaining our economy going forward and at present the Government are not properly supporting this.

So we will see what becomes of Opal and indeed the wider Student Living and Higher Education sectors in the coming months. I wish Stuart and all of the Opal Group people the very best at this tough time and thank them all for some very positive business in previous years.

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My MIPIM in numbers

Last week I was out in Cannes for the annual MIPIM property conference. This year I attended as part of the Manchester at MIPIM Partnership – an extremely well organised delegation of public and private sector partners, led by Sir Howard Bernstein at the City Council.

“Welcoming Lewis and Hickey Architects into the Manchester at Mipim partnership this year demonstrates how the City can achieve great exposure through collaborative working. It also shows that our team is a strong partnership which is inclusive. We want to engage with and support businesses who are established in the City, alongside those who are looking to increase their profile and grow.” Sir Howard Bernstein, Chief Executive, Manchester City Council.

It was a very successful week for me and I believe I achieved a number of key objectives. These were; to raise our profile in the Manchester property community, to spend time with colleagues from Team Nottingham (part of Invest in Nottingham) and to make as many new contacts as possible through one-to-one meetings and numerous events I attended.

Cannes2Despite some of the perceptions about MIPIM being all very nice on the Cote D’Azur, it is a tough week. I went with the sole objective of maximising outcomes – I think most people now go with this ethos. I did three back-to-back 18 hour days (from leaving my hotel to returning again). I don’t think I could have pushed myself much further. My feet/ legs took a battering.

Here’s a quick numbers overview of the three main days of the conference (Tuesday-Thursday);

  • Over 60 new contacts made.
  • 2 Breakfast events attended.
  • 2 Lunch events attended (one private).
  • 3 Evening Dinners (all private).
  • 5 Evening Drinks events attended.
  • 8 Private meetings held.
  • 5 Stand events/ sessions attended.
  • At least 25-30 leads to follow up on (most of which are project related).
  • High profile personalities I met included; Mayor of London Boris Johnson, Prof. Brian Cox, Tom Bloxham MBE, Nicholas Cowell (brother of Simon), Sir Richard Leese and Sir Howard Bernstein.

One of the highlights was listening to Brian Cox on the Manchester stand. It was a very smart move getting him involved as it attracted a lot of media attention. Brian spoke in a very informed and engaging manor; he’s a superb public speaker. He emphasised how important it is for the Government to invest more into leading innovation research, especially through our Universities. I think this is a very good point. You can see Brian Cox’s presentation at the link below (its worth a watch). I’m one of the two blokes at the front with a bald spot. I will refrain from naming the other one!

Click here for the Brian Cox at MIPIM video

Brian Cox

You can see all of the Manchester stand presentations and also a large section of photos from the Manchester events by clicking here.

So now I have the important task of following up the leads I have, to ensure we can realise value from being at MIPIM this year. I have already secured one major University opportunity from a meeting there, and have also been asked to look at another development opportunity.

MIPIM. Let the Business begin…

As you will know already if you follow my blog or @LewisandHickey on twitter, we are at (#)Mipim again this year. Most people who read this will probably also know what Mipim is, but for anyone who doesn’t; its the European annual Property conference. Its attended by around 20,000 delegates including, Investors, Developers, Agents, Consultants, Contractors, Local Authorities…and a few others! Its a big deal and is essentially three days of intense meetings and networking events. Its hosted every year in Cannes in the Côte d’Azur.

This year I am attending with the Manchester at Mipim Partnership – a delegation, led by Sir Howard Bernstein at Manchester City Council, which brings together 45 partners, mainly from the private sector. Its a diverse mix of companies and people – but all are here to discuss property and in true Manchester style, everyone is friendly, has a ‘can do’ attitude as is patriotic in promoting everything that is great about Manchester. Manchester really go for it at Mipim, they recognise the value it has – and this year is another impressive line-up. Click here to see the full line-up of the stand events. Tomorrow we welcome leading physicist Professor Brian Cox to our stand;

380416-briancox

“Acclaimed Physicist Brian Cox will bring international attention to opportunities for growth and progression across Greater Manchester during his keynote speech on the first day of MIPIM in Cannes.”

“The 15:30 (14:30 GMT) presentation at stand B1.00 will explore how the connections between people and places have the power to change the world. It forms part of a day of stand events focused on innovation and Manchester as a city that is leading the way and setting new standards across research, arts and entertainment, science and technology sectors.” click here for full press release.

Tim Hall from our London office is also attending Mipim this year to promote our London team/ work – especially our growth in mixed-use developments and retail led development. Tim is currently en-route to Cannes in a London Car Rally which will go over the Millau Viaduct tomorrow, before arriving in Cannes.

Also arriving tomorrow afternoon is the Broadgate Estates Cycle to Cannes team. I’ve been following these guys on Twitter and they have battled some rainy conditions as the 90 riders cycle the 1500km from London to Cannes. Joining them for the last leg of the ride is Mayor of London, Boris Johnson.

So as the UK battles another cold snap in weather, what does the outlook hold for Mipim? Well the weather here looks to be a mixture of sunshine, cloud and scattered showers. The same could perhaps be said for the property related economic outlook…I’m sure there will be lots of headlines emerging from Mipim in the coming days – its a strong platform for press coverage, especially to target International investors. However, the reality is that we remain in challenging times – especially in relation to property development/ construction activity. Having said that, the UK actually seems to be getting some positive press. I picked up a property journal today with a picture of London Bridge and a montage of huge new buildings behind it, with the headline “London’s Building”. According to CBRE, The UK led 16 other European countries in terms of Investment Activity for both Q3 and Q4 in 2012. This is reassuring, but as the title states; its very London centric.

So which sectors are people backing then for 2013? Industrial seems to be topping the asset classes across Europe generally, followed by Retail and then Offices. We’ll no doubt understand this outlook more over the course of Mipim.

I have a busy three days now, each one packed with meetings, key stand events, networking events, panel discussions, lunches and dinners. Most of my time will be spent at events with the Manchester team – these are mostly private access. You can see all the stand events on the website or the YouTube channel McrMipim. You can see my promotional video below where I talk about social media, tall buildings and our University work. Manchester is a competitive market, with some long-established and talented architects in place. However I firmly believe we have a strong offer and I’m keen to build new relationships whilst out here.

video

I will also be supporting, and spending time with, @TeamNottingham – these guys are promoting a strong message about Nottingham and the Enterprise Zone. They have some great supporters and I’m sure they will achieve a lot out of being here. I am hoping that I can help fly their flag with one of their T-shirts…

Mipim is not a race – its a marathon. You need to try and pace yourself. My objective is simple; to maximise outcomes from Mipim for Lewis and Hickey, this is serious business and I am focused on promoting our business and the regions we operate in.

Keep in touch with our progress by following us @LewisandHickey and re-visiting my blog…

New Formula one inspired cars

This week has seen some high profile new car model launches at the Geneva Motorshow. The supercar brands, it would seem, are merging closer and closer to Formula One design innovation and technology – this must be good! I’ve had a quick look over some of these F1 related models and thought I’d share some favorites;

First up is the McLaren P1 – the successor to the legendary road going McLaren F1 from the 1990’s (I’ve blogged about the new P1 previously, click here to see it). If money were no object I would buy one of these (£866k) and what an investment it would be as well. The previous version of this car is immensely rare and can trade for up to £10m!

mclaren-p1In second place; Ferrari have launched their top of the range successor to the Enzo and F40. Its is called the La Ferrari. As you might expect it is another contemporary interpretation of a beautifully crafted Ferrari. Its looks and sounds amazing. Take a look at the video here. It boasts a modest 963hp and has Hybrid technology, called HY-KERS. This adopts the F1 developed Kinetic Energy Recovery System to boost the power. The car has a lot of F1 inspired thinking in its carbon fibre chassis and bodyshell too, but to own (of even see) one might be a rarity as only 499 will be sold.

ferrari-laferrariIn third place, and to complete the top place of the podium…I should be talking about a Red Bull related car. Problem; Red Bull don’t actually make cars. They do however have a sponsorship tie-in with Infiniti cars (who?) They have been around for a while now and, in my view, are probably similar to Lexus. They have produced a ‘Vettel’ edition to further strengthen their brand link – it doesnt really shout F1 to me though…

infiniti_fx50One final mention is the quintessentially British (albeit German owned) Rolls Royce, and their new Wraith model (below), a 3-door GT/ Coupe car. This will no doubt have big road presence and exude luxury in every way. Take a look at the video here. Oddly, the doors open backwards. I sort of get this idea on the bigger limousine model, but why on this one? It seems clear to me that this is competing directly with the hugely successful British (and also German owned!) Bentley Continental GT, which is much better looking I think.

rolls-royce-wrath-14My lottery winnings are going on the McLaren P1; a British car, truly inspired by F1.