Here’s looking at YOO

Last month YOO founder John Hitchcox hit the headlines when the property design group was part of the £296m Olympia London purchase. He lifts the lid on the deal. Emily Wright reports “Waking up worrying in the middle of the night, feeling like the sky is falling on your head, is a sensation most successful people have to deal with their whole lives.” John Hitchcox, shrugs his shoulders nonchalantly, palms raised to the ceiling. “Thinking that you are useless all the time? That’s called motivation.” It is a sucker punch of honesty. Particularly from a man who has built up the multi-million pound YOO property design empire over 18 years with 78 projects across 55 cities in 36 countries. “I think I am driven by a fear of failure,” he adds. “That is definitely a big one. I have done a lot of things in my career and my life that haven’t worked out because I like doing different things. The problem with that is that you fall over more often. The answer is knowing when to get out and cut your losses. But that’s difficult because you have usually completely immersed your head, and your wallet, in whatever you are trying to do.” But that fear is not holding him back when it comes to dipping his toe – and a fair chunk of his aforementioned wallet – into new ventures. Last year the private equity and VC arm of the company, YOO Capital, raised a €200m (£175m) fund to invest solely in UK and central London real estate. And, two months ago, Hitchcox proved that he is not messing around when it comes to where he splashes the cash. YOO was part of a consortium of German institutional investors, advised by Deutsche Finance International, that bought Capital & Counties’ Olympia London scheme in West Kensington, W14, for £296m. A significant investment and quite a leap from branded interiors and bespoke lake houses in Oxfordshire. “It’s amazing but obviously the reality of being involved with a deal of this size has me up all hours and not being able to sleep,” says Hitchcox. [gallery type="slideshow" link="none" ids="884506,884507,884508"] Branded events space So how did the Olympia deal come about? Can we expect to see the first YOO-branded events space? And what else is on the horizon for a man who is perennially motivated to “always be doing something new”? Since setting up YOO in 1999, Hitchcox has become well known by many outside the real estate industry as a lifestyle brand guru rather than a property developer. Synonymous with a specific strand of luxury hotel and residential design – fuelled by high-profile collaborations with Philippe Starck, Kelly Hoppen and Kate Moss – it has been this side of the business that has propelled Hitchcox into the limelight (and The Sunday Times Rich List). But, as the former managing director of the Manhattan Loft Corporation is quick to point out, he is a developer first and foremost. I think Olympia has been a poor cousin to Earl’s Court for all of its life but it really is the most beautiful collection of buildings, and I can see the potential. It is a jewel that needs polishing” “I started life as a development officer back when I was 19,” he says. “Then in 1991 I co-founded Manhattan Lofts where I was a pure developer for years, although even there we did a lot of the design in house. When I left to set up YOO, the plan was always for it to be a design-led developer. But before too long, we had so many requests to design projects all over the world, we actually morphed into a designer. But the idea was always to co-invest in the projects. We always had the funding available to do that. I would say that now 50% of our work is design and 50% is property development.” Hitchcox says that, with this in mind, the Olympia buy should come as less of a bolt from the blue. “The investment arm has always been there,” he says. “We have just usually looked at things below the radar. But YOO Capital owns half of our Lakes project in the Cotswolds, we were partners on Greenwich Square with Hadley Property Group and Mace. Then we raised the €200m fund through Deutsche Finance and that’s how Olympia came around.” Before revealing exactly how the deal came about, Hitchcox explains why he took the decision to raise a fund dedicated to UK and central London schemes in the first place. It is, he concedes, down to a touch of fatigue. “I’ve spent the past 20 years travelling around the world, getting up at 4am, going to the airport, arriving somewhere and eating the entire mini-bar, feeling jetlagged, doing three days’ work, having more jetlag, staying awake for too long, eating too much plane food and arriving home a total wreck. I know this sounds silly, but I can get on my bicycle and be at Olympia in 10 minutes. It is a lovely change of pace and a really great culmination of the business for where I am in my life,” he says. As changes of pace go, it has been a pretty costly one. There must be more to it than a hankering for some downtime and an easier commute? “Honestly, when it first came across my table I thought ‘that’ll save me trips to the airport’,’’ he laughs – it is almost impossible to tell whether he is joking. “But of course there are other reasons. Here is a project that is the only exhibition hall in central London and it has been forgotten. I think Olympia has been a poor cousin to Earl’s Court for all of its life but it really is the most beautiful collection of buildings, and I can see the potential. It is a jewel that needs polishing – or rather a collection of jewels as this is 14.5 acres of west London.” [caption id="attachment_884509" align="aligncenter" width="775"] View of The Lakes[/caption] Design-led events space In terms of the deal itself, Hitchcox says that the €200m fund was raised through Deutsche Finance to help match the German investment company with UK and central London projects. “We knew them through another connection from a while back and they were very keen to invest in London,” he says. “We said we would look at some schemes for them. Three or four came up that we didn’t get and then Olympia came up. It was the first one that was beyond the size of the fund so we co-invested with the Deutsche Finance backers – two German pension funds including BVK. “We had been talking to Capco and when the purchase before ours fell through, they gave us an opportunity to have a look at it. It was first put on the table six months ago. It moved quickly.” The big question now is what YOO’s involvement in the scheme will be beyond the investment. Could this be the gateway scheme to a new breed of design-led exhibition and events spaces? “There is no intention whatsoever to change Olympia from an exhibition centre to any other use,” says Hitchcox. “What we are doing is looking at how we can enhance the buildings and the great shows that are put on there. We want to shine this beacon. We have very long-term investors with deep pockets and no intention to sell so we are dedicated to this scheme.” He adds: “We have planning to build a hotel on site but we don’t see it as being a massive residential project. I would be very surprised if any ended up on the site.” And what could YOO bring to the exhibition side of the venue? “I hope we are going to bring creativity, place-making, experience. Perhaps some branding. But it is early days and we are absorbing it all still really. We are just taking on the acquisition and listening to what everyone has to say.” Emerging tribes Beyond the Olympia deal, Hitchcox has been focussed on diversifying YOO’s UK portfolio for the last few years. As a result, the company has around £50m invested in wind farms and a further significant sum in The Lakes by YOO, an 850-acre luxury second home and holiday rental scheme set around six lakes in the Cotswolds. “I have always been really interested in alternative technologies,” he says. “Which is why we decided to invest in 17 wind farms and around four solar farms. Carbon footprint is a big issue for me because I spend an awful lot of time in an aeroplane and probably lay more concrete than most people in the world. “And The Lakes is a great example of the evolution of the YOO brand. We wanted to create an environment where everyone can feel comfortable. Because society does divide itself up into cliques, often radical cliques. I think we are actually moving away from that now to a more horizontal, tribal situation.” So is The Lakes the YOO equivalent of a country retreat-style commune? Not quite, but the retreat part is right. “We have built it all in a gravel quarry, excavated, created six lakes, planted half a million trees and built these houses down there, half of which are on the water,” says Hitchcox. “There is a spa, a gym, a sailing club, fishing, and activities. And more recently we have started to do bespoke house designs. So you can go down there, buy a plot and we’ll design the house for you.” But who exactly does Hitchcox consider to be YOO’s target audience? Who makes up the emerging tribe he refers to? “They are ageless,” he says. “They can be interested in music, art, design, enterprise, culture, progression. A group of people who come from all walks of life.” Diversifying From the leafy green Oxfordshire countryside to the concrete jungle that is Olympia, Hitchcox is clearly set on ensuring that the YOO portfolio remains diverse despite raising a targeted UK fund. But while the company will continue to grow as a global business, the man at the helm is ready to keep things local on a personal level. “I’m loving being back in England,” he says. “We will definitely be doing more in the UK. Something like Olympia is the next 10 years of my life and so it makes sense that my attention should be here. “It feels like the right thing for me, though. You know that moment when you get into a groove? Whether that’s singing a song, playing tennis, sailing – you suddenly get into your groove and your performance is enhanced. It’s exactly the same with property. And that’s what gets you out of bed in the morning.” He stops and pauses for a second, and adds: “Or, in my case, wakes me up in the middle of the night.”   • To send feedback, e-mail emily.wright@egi.co.uk or tweet @EmilyW_9 or @estatesgazette