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More work for architects as DevSec snaps up Cathedral Group

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Property giant Development Securities (DevSec) has bought up blossoming regeneration specialist Cathedral Group for £20.9million

The two companies had already been collaborating on projects at The Old Vinyl Factory, with Studio Egret West, AHMM and Duggan Morris and at Morden Wharf with OMA.

The move will see nine projects transfered from the up-and-coming, privately owned developer to the AIM-listed property developer DevSec, and could potentially mean more work for architects.

Speaking to the AJ, Cathedral’s creative director Martyn Evans said: ‘This deal won’t change the way we do things, in terms of how we approach property development.

‘But it will obviously allow us to deliver greater power in the market place. DevSec has a very large balance sheet and our ability to compete will be hugely enhanced.’

Opportunities will be many

‘Growth will be fast. There will be new projects coming online in the coming months and opportunities will be many.’

He added: ‘I have no fears whatever about the deal. We have been working in partnership for four years or so and our relationship is very good.’

The eventual, ‘total consideration’ for the deal will rise to £27.4 million ‘based on the current business plan’.

Cathedral’s chief executive Richard Upton and its chairman Barry Bennett will join the DevSecs board as executive director and non-executive director - however the Cathedral name will remain, the company effectively becoming a subsidiary of the parent company.

Michael Marx, chief executive officer at Development Securities, said: ‘The acquisition of Cathedral is highly complementary to our existing activities. We are adding a portfolio of attractive development projects to our own portfolio, with the potential to deliver further gains in the years ahead.

‘The consolidation of the resources of both businesses comes at a timely moment, as the UK economy, especially in Greater London and the South East of England, recommences positive GDP growth.’

Richard Upton, chief executive of Cathedral, added: ‘We already have a successful history together through our existing joint venture partnerships at The Old Vinyl Factory and Morden Wharf and our completed development at The Movement, Greenwich. We are confident that the integration with Development Securities will provide a stronger platform as we progress our existing portfolio of developments towards completion, and secure additional projects to further contribute to the growth of the company.’

Cathedral Group’s recent schemes include the Studio Egret West-designed Clapham One mixed-use scheme and a temporary cafe and performance space next to Greenwich DLR Station, which was shortlisted for the AJ Small Projects Award.

Previous story (AJ 22.03.12)

Cathedral Group’s Martyn Evans: ‘You can’t innovate by staying indoors’

Martyn Evans, marketing & creative director of blossoming developer Cathedral Group talks to the AJ about what he wants from an architect, living in tents and advice from David Bowie

What kind of schemes are you currently working on?
We are specialists in mixed-use development. Our £1 billion project pipeline splits almost exactly in half between private speculative schemes and Public Private Partnerships (PPP) where we are in partnership with local authorities across London and the South East to develop complex mixed-use schemes that have some public asset at their core. We’re creating new town centre spaces in Bromley and Deptford and regenerating entire areas of Brighton and Sittingbourne. We’d like to be known as developers who make beautiful inspiring places for people to live and work in.

How have the last few years been for you and how do you foresee the coming years?
 Exciting. We came through the credit crunch with our entire portfolio of schemes intact. It was hard work, but they’re all up and running now and in the last 18 months we’ve doubled in size. We’re exhilarated about the future. We’re going to make some great places and build some pretty good buildings too.

How has the developer landscape changed during the recession?
To survive we’ve had to be smart and work very very hard. I hope that that’s been true for everyone else too. It’s not a bad thing to have to keep your schemes running by being even more cost conscious and clever with your design to squeeze out maximum land value. Maybe it’ll mean we’re all going to be better off in the long run.

What do you want from an architect?
Inspiration. Sketching (by hand!). Imagination. An understanding of the commercial reality of our schemes. Genius. Hard work. Friendship. Fun. Enthusiasm. Beautiful buildings and places that make people happy.

Are you currently looking for new talent and how do you find your architects?
I just spent a week in MIPIM meeting new architects. We’re always looking for new talent. You can’t innovate by staying indoors. You have to get out, look at other people’s schemes, go to exhibitions, knock on people’s doors and fill your boots with inspiration.

You’ve said that a number of stalled PPP are now starting to move forward. What has kickstarted them?
The HCA has been instrumental in unlocking schemes. We wouldn’t have got our Clapham scheme out of the ground in 2010 without significant loan funding from the HCA’s Kickstart scheme. Elsewhere, in a difficult debt market, our schemes have got out of the blocks because we’ve been able to work incredibly hard creating innovative funding models and through working with joint venture partners to pool risk and funding streams.

What do you think about the current government’s attempts to drive development?
The government’s encouragement of local authorities to find ‘inefficient/underused’ land and sell it to boost public spending coffers is short sighted. We’d encourage local authorities to see underused land as a valuable asset that, put into a clever PPP deal, could return exponential economic value.

What would you most like the government to do for you?
Keep stimulating the development market through innovative schemes like the Kickstart and Get Britain Building Funds and increasing SDLT thresholds.

Which of your projects is your favourite and why?
Our scheme in Clapham [by Studio Egret West], which we are just about to complete, sets out our PPP model so simply that it has to be my favourite. New library, new leisure centre, no cost to Lambeth Council, funded by private development, profit for the developer. A true mutually beneficial partnership.

Which regeneration scheme most inspires you and why?
I went to New York to see the High Line Park. There isn’t anything more brave, inspiring, beautiful, clever, ingenious and simply joyful. I also like being in my tent on holiday in Cornwall in the sunshine. It takes 15 minutes to put up and does what every great structure should do: keeps you dry and has a door to go where you should be as much as possible – outside.

Who has given you the best advice and what was it?

David Bowie: ‘Never look back, walk tall, act fine.’

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