Stephen Conway is restless. Despite a 68% share in Galliard Holdings, the UK’s market leader in apart-hotels, a stake worth £82m, the 59 year old is looking beyond the mainland to maximise profits.
His time is split between the UK and jetting off to far-flung destinations. At home, in a joint venture with Paul White of Frogmore, he is working on his latest scheme, Westminster Bridge Park Plaza, a glass and steel construction of 953 five-star standard flats with views over Big Ben, the Houses of Parliament and the London Eye.
Meanwhile, abroad, Conway is also planning development projects in a number of the “new” economies of Eastern Europe and the developing world.
At the beginning of March, Conway returned from India with plans to put together a landbank on the subcontinent.
Resi schemes in India
With Jack Petchey of Trefick and Petchey Properties, Galliard plans next year to construct a £5m residential development built to English standards in the industrial corridor between Delhi and the port of Mumbai. This will be aimed, he says, “at British Asian families looking for a bolt-hole in India”.
It is a strategy based upon decades of experience in up-and-coming real estate markets, both in the UK and, more recently, overseas. After completing a 300-flat development in Bodrum, Turkey, in partnership with Paul Kemsley and Vincent Goldstein of Rock Investments, then 250 flats in Bansko, Bulgaria, with Petchey, last year, Conway believes nimble-footed developers must now look overseas to maximise potential.
It is his first press interview and he is uncomfortable about the prospect of too much personal exposure. As a businessman, he has a reputation for being astute and highly opportunistic and only after proffering copious copies of marketing material on Westminster Bridge Park Plaza – currently a huge building site on a roundabout on the south side of the bridge – does he relax.
“We target investors keen to acquire a piece of prime real estate at a manageable level, and the product has been selling fast,” he says, leafing through glossy brochures.
Work on the 940-unit scheme, due to be completed in January 2010 at a market value of £300m, started at the beginning of this year. More than £225m of sales were agreed by November 2006, with investors guaranteed a 6% net return for five years from completion. It is adjacent to a second Galliard/Frogmore development due to be completed in July this year, the 400-unit Addington Street apart-hotel, where all units sold for £100m gross.
Although the company is now known for apart-hotels, Galliard’s roots lie in the residential sector. Conway was among the first to convert redundant offices and warehouses into homes in London, spotting the potential of rudimentary residential markets in the early 1990s.
When recession struck, London’s Docklands were a mass of derelict hulks and the GLC offices stood empty. Conway realised they would make wonderful residential conversions and helped to kickstart the resurgence of both the South Bank and the area surrounding Butler’s Wharf by reworking them into luxury flats.
He acknowledges his team push their product “exceptionally hard”, often spending £250,000 in advertising and intensively marketing Galliard’s schemes.
Conway, being hands on, often attends launches, where the first few properties are sold at massively reduced prices.
“It is not something revolutionary. I stayed in an apartment in Vail which was operated on this basis, and Donald Trump has run similar schemes in New York,” he says of his apart-hotels.
“We would not develop something on the basis that our investors pay more than the market rate because we do not want them to lose money when they come to sell them on – and so anyone who has bought from us since 1991 has done well.
“We planned them when the office market was in the doldrums and we inherited the Lambeth sites as the remains of the County Hall purchase. We tried for years to get planning permission for new offices and, when it finally came through, the market had disappeared.
“We were really let down by Ken Livingstone’s department because they took so long to approve it. We felt certain the location was too good to leave dormant and were backed by Heather Rabbatts, the leader of Lambeth council at the time, who did not want it to appear that people were coming into a slum area. Now it will have probably one of the finest hotels in London with a conference and exhibition centre.”
A driven individual, Conway returned to work at Galliard Holdings within weeks of back surgery in December 2006. He clearly relishes his role at the firm he named after the road in Enfield where it first built 120 flats for £40,000 a piece at a cost of £1.5m. Today, it employs 180 people and sells its apart-hotel units at prices from £255,000.
Early days
When Galliard was launched during the recession of the early 1990s, Conway resisted pressure from the banks to give personal guarantees, pointing out that two-thirds of the company was owned by institutions, which gave it a strong covenant. It is a policy he has sustained.
He was born in Mile End, east London, in 1948 to Jewish immigrant parents. After leaving school in 1964 aged 16, Conway developed his early entrepreneurial spirit through trading, working in a bank and running a market stall at weekends.
In 1969, he began his career in industrial finance, working for the First National Finance Corporation before being poached to run a small property-lending bank until 1974.
Then followed the worst property and banking crash of the century. “We had deposits of £21m which were all called in within 10 minutes of London & County Securities going bust. We were rescued by the Bank of England and formed Portland Place Developments from its remains. It was a good lesson in how things can change quickly,” he says solemnly.
Conway worked with Dennis Cope of Frogmore until 1991, in a public company atmosphere, before joining forces with John Black, formerly of First National Finance Corporation, and simultaneously launching Galliard Holdings.
He says: “Galliard was very lucky because it started just at the time when the market was recovering from the 1989-91 crash. I am a calculated risk taker I suppose, and the biggest risk I took was buying that first site in Galliard Road when it was difficult to get the money.
“At that time, the major banks were forced into realising cash from the numerous lending mistakes of earlier years. They needed to get rid of them and for someone to realise them and we were pretty good at this.
“We were opportunistic and bought as much of the stock as we could. We purchased 103 flats in Narrow Street in a transaction with Jack Dellal and his nephews, selling 90 flats in a weekend.
“The market had collapsed and everything had gone down by 60% but, when you show people a bargain, they will buy – and they queued up to do so. It was a transaction that reignited the Docklands. But we did not cause it – if someone else had done the same the next week, it would have had the same effect. It was simply a case of someone having to do it first.
“Timing is everything in property. The thing is based on feast or famine and there’s a kind of logic to it. When there is too much, the market collapses. Those of us who’ve been through the bad times are always watching for the crash, and some call it too early.”
County haul
He cites his most significant business achievement to date as the purchase, with Paul White and Dennis Cope of Frogmore, of the former GLC building and County Hall in London which “proved extremely profitable”. At the same time, Conway was developing the Butler’s Wharf Estate in a joint venture with them “producing the sort of returns you cannot see today”. He then went on to buy the Shell Building.
Today, Conway believes developers face considerable challenges as the market becomes increasingly sophisticated. He says: “I think the nimble footed now will probably concentrate on Europe and emerging markets.”
His firm still attempts to buy in areas that are underdeveloped, and has recently moved into Bermondsey. He says: “We try to move into sites where we can make some money and leave enough for purchasers to have something in it too because happy buyers come back to us. It is a risk-averse business model operating from fear.
“When I was a kid, I worked in the market running my own stall. After I left school with five O-levels, my mum wanted me to get a ‘proper job’ paying £6 a week in a bank. But the attraction of getting £40 a week from the market on a weekend was too great to resist.
“So the fear is never wanting to revert, ensuring the business stays sound and secure. It is a trait with all Jewish immigrants. Many kids today do not have the benefit of being hungry for material things but it made many of us go out and have to achieve.”
Conway: plans to develop in India are based on experience of emerging markets in Turkey and Bulgaria
22 February 1948 Born in Mile End, east London
1959-1964 Educated at Morpeth Street School, Bethnal Green, London
1964-1968 Mercantile Credit, trainee credit analyst
1968-1972 First National Finance Corporation, new business director
1972-1974 Forms Lington Holdings
1974-1988 Remains of Lington Holdings sold to Frogmore, where he becomes director of trading
1991 Forms Galliard Homes
Lifestyle Lives with wife Hilary in a penthouse in Marylebone, W1. He has five children. Interests include golf and skiing
