Turnstone has navigated Cambridge’s planning regime, and is now the first developer to work with the university.
To an outsider, it might seem as if Chris Goldsmith is dreaming up new and unusual ways of torturing himself.
Since founding Turnstone Estates in 1989, he has become an east of England specialist. But what has gained him most credit in the industry is his ability to, almost magically, deliver projects in Cambridge – a city with a distinctly less than laid-back attitude to development and an unpredictable planning policy. It is a place that even the hardiest London developers have shied away from.
For example, he took on the might of the Cambridge public to deliver the city’s first out-of-town leisure park, when the majority wanted Turnstone to turn the 9-acre former cattle market into a public park.
He then set to work on the1,200-acre Waterbeach – a settlement of around 10,000 homes north of Cambridge. The joint venture between Turnstone, St John’s College and a Landowner’s Trust, however, failed to get Waterbeach chosen as the preferred site in the Cambridgeshire and Peterborough Structure Plan. Undeterred, it is now pursuing consent through the Regional Spatial Strategy for the east of England and local plans.
Now, with a book value of £34m and 15 projects in the pipeline, Chelmsford-based Turnstone is set for another first, becoming thefirst developer to work with Cambridge University.
The developer is speculatively developing a 40,000 sq ft office building on the university’s campus in west Cambridge. Called East Forum, the estate is already home to the physics, medical and veterinary schools. In addition, Microsoft is launching its first-ever research facility outside the US.
A planning application was submitted last week, and concept architect Wilkinson Ayre has been appointed. Turnstone hopes to be on site early next year, with completion scheduled for Q2 2009.
“It will be perfect timing,” says Goldsmith. “There is very little grade A supply at the moment. We are now down to about eight months’ supply.”
For the university, the scheme is a complete departure, says Goldsmith. The colleges have frequently joined with private developers but, until now, the university itself has acted alone. “It got fed up with the fact that projects can go over budget. We are insulating them,” explains Goldsmith.
“We paid a premium for the site, and we take the risk on the planning application.” In return, the university has handed over the land to Turnstone on a peppercorn rent. As a result, some restrictions have been placed on who occupies the building. Turnstone can only let the remainder to companies with a connection to Cambridge, and in chunks no larger than 10,000 sq ft.
Cambridge Enterprise will transfer into 26,000 sq ft in a second building.
The prospect of working with an 800-year-old institution would make many run away in horror. Not Goldsmith. He is diplomatic in describing the university’s approvals process. “It is interesting, and a good thorough process,” he says, spelling out the words in a careful, measured tone. He explains that all members of the university teaching staff potentially have a vote and can press for a full vote on any project.
“The good thing about Cambridge is that you are not dealing with idiots.You have to have patience and try not to reinvent the process,” he says.
Far from being frustrated with the system, Goldsmith sees the advantages. “Some London development companies have come in expecting something to happen really quickly.”
Without naming names, Goldsmith points to large-scale development proposals. “There’s a feeling that they know best,” he says. “They are so obviously inappropriate with their consultation. That acts as a constraint on supply, which is good for us because it means that not anyone can come along.”
This is typical of Goldsmith’s approach. Local property agents describe a quietly shrewd character. “He does his research right down to the micro level,” says James Lankfer, head of retail at Bidwells. “He knows the politicians and the planners, but he has never been one to crow about what he is doing.”
Yet for Goldsmith, property was an accident. The son of a chartered surveyor, he says agency and development was “the last thing my father wanted me to do”.
Instead, a young Goldsmith wanted to build bridges. Having started an engineering degree at Cambridge, however, he swapped to a land economy course to give himself “more time on the river”.
Youthful exuberance
It was during a stint at Drivers Jonas, consulting for industrial developer Dencora, that the idea of Turnstone Estates was first floated as an “anything but industrial” arm for the shed specialist.
In 1988, Dencora gave Goldsmith £1m to invest, and Turnstone was born. Goldsmith remembers his early youthful exuberance with a wry smile. “It was the back end of the 1980s, and I was going to do everything – set the world alight. We’d have floated the company in three years, and I’d probably be LandSec by now,” he says laughing. “Then the property market nosedived and removed all that.”
The company had to wait until 1994 to start on its first serious development of Elizabeth House in Cambridge. “We hit the market just right. I bought off a projection of £12 per sq ft, and we let it for £16 per sq ft,” he says.
Since then, Turnstone has been involved in high-profile projects, including Cambridge County Court and the 5-acre Princes Street redevelopment in Ipswich.
Following several ownership changes, Turnstone eventually landed in the hands of Royal London. “We were an odd fit for them,” he says. Cash-rich from the £39m sale of Cambridge Leisure, it bought out Royal London in October 2005. “We had to reduce our balance sheet, but it meant that we were 100% Turnstone. I don’t want someone on my back constantly asking how my rate of return is. It’s not good for developments.”
It is this structure that has allowed Goldsmith to be more laid-back about his balance sheet. Last year, the company reported pretax profits of £2.3m on sales of £7.2m. This year, Goldsmith believes the figures will be around the same.
“There is a bit of a hole now, but we are still profitable,” he says matter-of-factly. This is the sort of statement that would send shareholders into blind panic, but there is little worry in Goldsmith’s voice.
“I don’t care what the profits will be next year,” he says. “Development makes the profit line lumpy, and I’m fairly conservative about when we take our profits.”
For example, Goldsmith has put “not applicable” in the profit and loss sheet next to the Waterbeach scheme. “We are in that for the long, long term, and it is held in trust,” he says.
“The banks are fine about it,” he adds. “They look at your profit and loss but, generally, they are lending against your integrity and against the projects.”
In terms of development, he says the company is most comfortable in the £10m-20m bracket.
Land projects
As for large-scale projects, such as Waterbeach, Goldsmith says: “We get approached from time to time to get involved with strategic land projects, and we would do it again, but not outside East Anglia. You need to know the people, the politicians and the planners. It is a delicate process that requires skill.”
That, in a nutshell, is Goldsmith’s magic.
Chris Goldsmith
Born December 1960, Chelmsford, Essex
Education Gresham’s School, Holt, Norfolk Selwyn College, Cambridge. Degree in Land Economy
1982 Joins Drivers Jonas as a graduate surveyor
1986 Appointed associate at Drivers Jonas
1989 Founds Turnstone Estates
Lifestyle Separated with two children. Likes sailboat racing, long-distance walking, cricket, rugby, music and arthouse cinema
