COMMENT It has been said that insanity is doing the same thing over and over again but expecting different results. It’s also being an SME developer, apparently.
The word “insane” genuinely featured in three established SME Q&A responses in recent weeks; twice in the new Real Developer podcast and once by a well-known mid-sized developer chief executive in our special guest meetings, all answering “what makes a great developer?”
The collective view was that to pull off the vast extent of ball juggling needed now more than ever in this space, you have to be slightly bonkers. I actually don’t disagree. The challenges of development are growing so quickly, it’s hard to keep up, let alone fine-tune a revised strategy. Planning delays, build costs, material delays, labour shortage, inflation, market unpredictability, nutrient neutrality, supercharged fire regulations, new sustainability standards, solicitor backlogs, vendor expectations… it really is a wonder why anyone does it.
Who, how, why
But enough do still, with or without the relevant experience needed. And therein, in my view, lies the problem and opportunity. Recognising fully the ridiculously low barriers to entry, challenging vendor expectations and ultra-competitive land market is, in itself, where the edge for development superiority exists.
As an off-market land consultancy, I see a variety of bids and receive feedback from a range of land stakeholders. One key observation is that developers often make it harder for themselves by not making it easy for landowners. In under-presenting their bid and business, they deny the owner and representative the chance to fully appreciate the vast extent of their knowledge and track record, and subsequently question other bids received.
The simple bid process, which fortunately has a degree of copy and paste-ability, lies in the “who”, “how” and “why” detail, presented alongside bids. As a sector, we cannot continue to claim vendor expectations are challenging if we do not do enough to change them.
Start with “who” you are, as a credible developer, letting stakeholders see exactly what you have done before, that your brand is recognised and that your team is dynamic and publicly available. Having screened hundreds of Real Developer accreditation applicants since 2019, I can very quickly spot valid talent and ability when the trust indicators are made really easy to see. Vendors are no different.
Next is “how” you are going to deliver the value, and not only make this site worth what you have diligently bid, but also deliver that promise. Vendors need expectations managed, and giving them a clear indication of your proposed approach is not only doing something different to many of your peers, it’s making sure they can get on board with the way you will do it.
Give your vendor a reason to challenge the other bidders and wait for those without a developed plan to stumble away, as the seller’s side hopefully calls BS. Importantly, help them see clearly the steps before and after exchange.
Best as an underbidder
Finally, explain “why” things are the way they are in your offer and terms. The timeline, the figure, the deal structure. Demonstrate you have acknowledged their needs, whether tax efficiency or attitude to risk. Give fuel to their uncertainty on possibly higher bids, by presenting stats on local planning trends and your previous successes. Try showing BEIS 12-month stats, circulate expert market opinions, openly sharing formal feedback from potential build partners.
We all know that many of the best deals you will do are as an underbidder. My feeling, echoed by much of the land representative community we work in partnership with, is that it’s sometimes better to be a well-presented, genuine second or third than be an overly bold and bare-bones first. The land space is only becoming more accessible and transparent, and leading from the front when buying sites is one sure-fire way not to lose your head trying to stay ahead.
Alex Harrington-Griffin is chief executive of TrustedLand
