John Woodman is troubled. Not because his company is suffering post downturn. Not a bit of it. Malcolm Hollis is set to hire 20 new staff a year from this summer onwards and is on track to double turnover in the next three years.
And it’s not because he has become frustrated by his sector’s perennially unsexy reputation: “Glam just isn’t the word really, is it? Building surveying will probably always be viewed as boring, we’re ?used to it.”
No, John Woodman is troubled by something much more distressing – a distinct lack of summer holiday footwear being worn in the office: “We have always had a really fun culture here but, of course, over the past four ?years that has dulled down a bit,” he says.
He pauses for a second before adding, rather sadly: “I have certainly noticed that staff have stopped wearing their flip-flops to work so much.”
Arguably flippant out of context, the comment is indicative of the scaling back of an overarching company philosophy that, pre-recession, was heavily geared towards corporate hospitality and sailing events though the latter remain a Malcolm Hollis favourite – the group has a prominent yacht at MIPIM. But such “nice-to-haves” were at least cut back across the board as times got tough. Having said that, times never really have got all that tough for Malcolm Hollis. Not even in the regions.
The 21-year-old building surveyor has grown steadily over the past four years picking up burgeoning opportunities in intensive asset management across the UK and building on dilapidations expertise.
Now there are plans to open two new regional offices in Liverpool and Aberdeen, and to expand into Europe over the next 12 months. Turnover is expected to leap from £11.2m for the year ending April 2013 to £21m by 2016.
The flip-flop drought, it seems, is likely more of a market sympathy move than a reflection of internal office sentiment. “When things get serious, you have to be serious,” says Woodman suitably seriously.
In the depths of Mayfair’s Lansdowne Club – no flip-flops here – the 50-year-old senior partner talks about future growth plans but first explains how a sector often dismissed as dull is an excellent barometer for gauging investor activity.
Survey says…
“To get the best idea of what is going on in the investment market you have to look at the survey side of the business,” explains Woodman. “That comes from looking at how many queries the survey team is getting and where they are coming from.
“Things are certainly busier now than they were three years ago,” he adds. “Queries are up 50% from 2010. But the problem is that there is nowhere near enough product. Everyone is hoping the banks will release a bit more. That pressure is mounting. Institutional investment is obviously offering up glimmers of hope in the form of speculative development. This is slowly seeing people becoming genuinely more excited and more optimistic.”
Malcolm Hollis’s work breakdown has gone from being 65% dilapidations a decade ago to now split evenly with due diligence and project management.
And all three strands of the business are faring well both in London and across the regions, with an even 50% revenue split coming from the capital and outside the M25: “What we do – intensive property management – is what is required at the moment,” says Woodman. “If you are going to make money from existing stock, you are going to have to work on it and that’s very much our bag.”
He can only see investment activity continuing to rise as the company picks up work with big institutional investors and developers including M+G Real Estate, Aviva, Legal & General and LaSalle as well as start-up companies such as Mike Hussey’s Almacantar, with which Malcolm Hollis worked on Centre Point.
But he adds that while investment might be increasing, funders are much more exacting when it comes to the state of the product: “The level of due diligence undertaken nowadays is much, much greater than five years ago. Whoever the funder is, they will be looking at that much more closely.
“Coming up to the credit crunch, the focus wasn’t on the survey process but getting the deal done as fast as possible. Now people want to know if there are problems with these buildings so they know how to make the most out of the asset.”
He adds too that there is definitely a move towards investment in secondary type assets: “We are doing a lot of work in this area. Whether the game plan is to move from an asset from secondary to prime I am not sure.
“But it is certainly to work the asset, improve the rent, juggle the tenants. And by doing that you can get some very good returns.
“I think there will be a real shift towards this sort of thing, mainly because there is not enough stock for all the funds out there so they have to start looking at different products.”
Doubling up
The Malcolm Hollis team may be keeping busy, but doubling current turnover by 2016 sounds ambitious.
“Oh, it’s definitely doable,” says Woodman. “We have a very focused strategy. We are building our clients and cross selling which is getting easier the more high profile the schemes we are working on.
“We will be opening a new office in Liverpool this year and hopefully one in Aberdeen before too long. Then we plan to bring an extra 20 people on board every year – 12 of whom will be graduates – in London and across the regions.
“We have a good reputation, we are not the cheapest but we are good value for money and we have just worked very hard to get in front of the right clients and funds.”
Whether or not the double turnover goal will be as easy to hit as Woodman hopes remains to be seen. But so far the figures look good.
In results for the year ending April 2013, the group was on track with a 16% growth in turnover to £11.2m and a profit rise from £6.6m in ?April 2012 to £7.2m in April this year.
And when it comes to expansion the building surveyor has its sights set further afield than Scotland.
Europe calling
Woodman says the group is poised for a debut foray into the European market with a particular focus on Paris and somewhere in Germany. It is also looking at the Nether-lands, Denmark and Poland.
Woodman hopes an ?overseas move might bring in an extra £5m of revenue in the first 12 months and says it would not be unrealistic to expect the group’s European businesses to make up around 10-15% of overall turnover by 2016.
For now he remains cagey about where is first on the list. Though he does let something slip: “We have French speakers in the office ready to go, but no one I know of who speaks any other languages.”
Looks like La Malcolm Hollis could be first off the starting block then. But a sartorial inventory may have to be completed before arrival. A flip-flop in Paris is probably a greater sin than a flip-flop in the Lansdowne Club.
