In rural England, it pays to get on with your neighbours. That’s why this is an uncomfortable time for Taunton developer Summerfield.
As protesters embark on a new campaign against Summerfield’s plans for 315 homes on Taunton’s so-called Green Wedge on Killams Lane, the company, led by chairman and chief executive Richard Lloyd, is preparing itself for trouble.
Two years ago, when plans were last mooted – and rejected – for the 50-acre site, staff cars were vandalised and the Summerfield office covered in graffiti.
For Lloyd and his team, this could be the first of many encounters with angry locals as the company switches its focus from commercial to residential.
The move comes after 25 years in which Summerfield has often dominated commercial development in a swathe of the rural South West, from Exeter to Chippenham. Since 1987, Summerfield has developed more than 3m sq ft of commercial floorspace.
For example, the award-winning 40,000 sq ft office Oxygen House, built at Exeter business park for sports business ATASS, is the latest in a parade of commercial successes. The 40-acre Westpark site at Wellington, a series of city centre and industrial schemes in Bristol and a steady flow of deals at Methuen business park, Chippenham, have kept up the pace during the difficult years since 2008.
Diverting resources from offices and workshops into residential is the latest move by one of the region’s shrewdest property operators. Lloyd, who joined the business in 1987, is due to step down as chief executive in 2014. He will remain chairman, but is leaving his successor, Chris Winter, a golden legacy.
“The commercial market has not been as strong, so we’re switching emphasis to residential where, in the South West, it is still relatively strong, especially in the smaller village sites we concentrate on,” he says. “We’re light on our feet, and have a supportive bank in Lloyds, which means we can move resources.”
As well as the Taunton scheme, there is a 120-unit project in Bridgewater, and other developments are being prepared.
Summerfield’s business has been built on local knowledge. If a site is west of Exeter or north-east of Chippenham, the developer won’t look at it.
Lloyd explains: “We’ve looked at Swindon and Plymouth, but it’s just a little too far for us to service from Taunton. And they are different markets, outside our home market where we have strong relationships with local agents and know them very well.”
Established relationships helped Summerfield get into commercial property in the first place at Taunton’s Blackbrook site. The company’s former MD, Mike Fodden, was able to use his personal contacts with the landowners, the horse-racing Pipe family, to step in quickly when the preferred developer, Rosehaugh, hit financial trouble. Summerfield was able to put together an overnight plan that secured the 45,000 sq ft relocation of healthcare firm WPA from Bristol, and kick-started commercial development on the site.
Better still, Summerfield’s joint venture with the landowner cut risk to a minimum because there was no expensive upfront outlay on land purchase. It is a model the developer has followed several times since then in Exeter and Chippenham.
“We’ve weathered two recessions because we haven’t over-extended ourselves buying sites,” says Lloyd. “We haven’t had a lot of development in the pipeline either, because we mostly pre-let and pre-sell off plan. We have a track record, and landowners and occupiers trust us. That’s the key to it all – trust. It’s very much a people business.”
Lloyd and his team win plaudits from local observers. Ralph Collison, partner at the Exeter office of Alder King, has worked with Summerfield for many years. He says: “They have bought wisely and operated shrewdly over the long term. They wait for the right occupiers, and they stick to what they know. They’ve also avoided the temptation to borrow heavily. In Exeter, and elsewhere, it’s been all about patience.”
With lines of credit worth £10m and a portfolio including 50 acres of serviced commercial land, Summerfield will not be leaving the commercial development scene, but it will be easing off.
Reflecting on the latest protests at Taunton’s Green Wedge and the 2010 attacks on the Summerfield office, Lloyd says: “We await events. It’s not really one for us to solve. The council will make a decision and people have to behave in accordance with the law.
“I hope they will see us as good local developers. Interestingly, the people living nearby in houses we built 20 years ago are not objecting to the plans.”
So it does matter who you know in the rural South West – and Summerfield still has plenty of friends.
Nikal goes for Somerset gold
With two 20,000 sq ft design-and-build deals under its belt, Manchester developer Nikal is enjoying its surprise debut in the Somerset office market.
Nikal never expected to be developing in Wells, but when jv partner David MacLean Developments collapsed in 2008, it was left holding the 17-acre Cathedral Park site.
Accountant Old Mill is relocating from Shepton Mallet to a 20,000 sq ft freehold block, joining housing association Flourish, whose HQ is also at the 180,000 sq ft park.
“We are very pleased,” says Nikal director John Moffat. “Obviously, this part of Somerset hasn’t got a big office market, but if anyone wants high-quality space, they have to come to us.”
Nikal is now looking at smaller freehold and leasehold options at Cathedral Park and aims to get deeper into the Somerset office scene. “We wouldn’t be averse to another scheme,” says Moffat. “It’s a long commute from Manchester, but we’re enjoying it.”
