“I wanted to go to Hollywood, but I became a builder.”
Not all dreams come true. Some turn into something even better. Or that, at least, is the lesson that Oliver Mason, co‑founder and acquisitions director of Magna Group, is taking from dropping out of his media course and becoming a labourer. And to be honest, the decision doesn’t seem to have done him much harm.
Magna Group may not yet be a name that rolls off the tongue first when you are asked to name a residential developer, but this relatively small player has big ambitions.
Founded in 2014, the group is focused on going from zero to £1bn in just three years.
Can it do it? Chris Madelin, co-founder and chief executive of the group, is adamant it can. “We have always said we would get to £1bn in GDV by the end of this year and deliver that out over the next 24-36 months. We’ve already done nought to £145m in 26 months. We’ve been getting on it with it.”
Mason is equally confident. “Our vision is to become one of the UK’s leading property developers,” he states in his opening gambit.
Much-needed homes
Magna began its life by taking advantage of permitted development rights, taking old office buildings and turning them into much-needed homes. But, says Madelin, unlike many of the other PD developers out there, Magna wants to build a brand with its developments. It wants to create a product that it is proud to put its bold M logo on.
“PD is about 70% of what we are delivering,” says Madelin, “but there are not many people out there that are building a brand in that sector… A lot of PD developers are in it to make a quick buck. They go in and do the bare minimum and leave it looking like an office building with curtains hung at the window.”
With projects already under way in Aldershot, Fleet, Frimley, Godalming, Maidenhead, West Byfleet, and Woking, Magna is ready for its next phase of development.
It plans to move into the private rented sector this year, teaming up with an institutional investor to become a major player. But the area of business growth where the team gets really animated is town centre regeneration and the possibility of building Magna towers.
“When Oli and I were back on the building site in our late teens, we always said we wanted to build skyscrapers one day. We are very grateful now that we have the opportunity to do that,” says Madelin.
Magna is currently heavily focused in the West London commuter belt but says this year is all about growing to an “all London” commuter belt before looking further afield as transport links improve.
“The sort of buyer we capture is fed up with the London price rises. They can buy one of our homes for half the price and get a better spec and still commute in in the same time, if not less,” says Mason.
Towers for town centres
The group believes that towers are key to town centre regeneration. “A lot of humans in a small place can service retail,” says development director Jonathan Beach. “You do need a local authority with a lot of vision but towns are struggling. They are not getting the volume and the under-40s that buy our properties don’t want to live on an edge of a town housing estate. They want to be right by the station, they want to rock out of bed and be standing on the platform in five minutes.”
That may be true, but for every person that loves a tall building, there are probably at least five that hate them – and in an era of growing nimbyism, does Magna really think it can develop its purple M-branded towers in commuter towns across the South of England?
Madelin is refreshingly blunt. And honest.
“If we are going to stick a tall building in a town they [the objectors] are going to have to deal with it. But we are going to make it have as little impact as possible,” he says. “There are positive reasons we are putting a tall building in your town. Do you want to keep looking at this bit of 1970s crap that has been built or do you want something new and fresh that is going to help people – or do you want us to stick 500 houses in a field?”
Mason adds: “We just want to get on with stuff. We want to get homes delivered. We are of the age group of the people who are struggling at the minute, so we can relate. Focusing on making a town an experience is important.”
£1bn and beyond
While neither Madelin, Mason nor Beach will admit that making money is that important to them, securing profit to pump back into the business to grow it to beyond £1bn by the end of 2017 is. And so far, the group has been doing pretty well adding value to its PD projects.
Madelin cites the example of its property in Frimley, Surrey. The group acquired a 30,000 sq ft office building in the town with PD consent for 36 homes. It had a GDV of £9m. With some tweaking, the flat count increased to 58, boosting the GDV to £12.5m. It then upped the housing level again to 62 by using a duplex scheme that went up into the roof, adding a further £2m to the GDV. Then, still under PD, Magna got the undercroft parking consented back to residential, adding 26 more units. A slight shuffle of the mix meant the group ended up with a 91-home scheme with a GDV of just over £19m.
Doubling the uplift is not bad going, but with ambitions of not just London commuter-belt domination, but UK and global, significant investment will be vital.
The group has mostly been funded by high-net-worth investors, and in December last year it launched a private capital arm, Magna Capital, to club together private financiers to provide cash for development. The arm helps smaller investors, those with £100,000s rather than millions to invest in Magna assets.
But, as the group moves deeper into the PRS and further outside its South East homeland, it expects to work much more closely with the institutional market before either partially or fully listing itself on the stock market.
Legacy
“For me, the reason I got into this was to leave a legacy. To leave a serious empire for the world to remember us by and make a massive, massive change. We want to be remembered as shaking up the property industry and bringing a bit of cool back,” says Madelin.
And what about those Hollywood dreams?
“When I dropped out of my media course and went in to labouring I thought I had taken the wrong path,” admits Mason. “But what I found out was that I had a real passion for property.
“One of the amazing things about property is that you get to create something that is going to last for a very long time,” he adds. “We are entrepreneurs, we are creative people and we want to make a difference to the planet, to towns and cities – and creating beautiful iconic structures that people love to be in is big to us.”
So, perhaps not Hollywood – but Magna, as the name suggests, does have its sights set on greatness.
To send feedback, e-mail Samantha.McClary@egi.co.uk or tweet @Samanthamcclary or @estatesgazette
