This week, as we continue our ongoing series speaking to senior figures in the UK housebuilding industry, our focus falls on an independent developer with a presence across the southern half of England, and pose the questions to Acorn Property Group’s boss, Melanie Omirou.
Hi Melanie, please tell us a little about yourself and Acorn Property Group.
I joined Acorn Property Group almost 14 years ago. In 2014, I was appointed managing director. As part of my role, I am responsible for the procurement of all development, equity and investment funding for the company. This also involves funding for joint ventures and collaborations with charities and numerous landowners.
As a mother of nine-year-old twins balancing work and family life is important to me and can be challenging. My day normally starts with a 6am run, followed by the school run, 9.00am to 5.00pm in the office, back home for homework and dinner whilst trying to fit in the renovation of our recently purchased Georgian house with my husband.
Acorn is an independent residential-led developer, with offices in London, Cornwall, Bristol, Cardiff and recently Hampshire. Each office is very different and caters to the local community’s needs. However, wherever we are we try to promote sensitive design, whether it be striking new architecture or the conversion of an existing building.
As a result we have been creating award-winning residential and mixed-use schemes since 1995. Most of our schemes comprise 20 to 40 units although we often do less and have a number of 100-unit schemes. Our business is based around our ability to react to the land opportunities quickly and to be able to create value by building high-quality niche developments at a budget to suit local prices.
None of our projects are the same; big or small each get the same amount of attention which has resulted in us winning numerous awards for our schemes.
What kind of properties and developments do you specialise in?
We do not have any typical sites but we do tend to buy sites ones where we can create value through our design skills and imagination. There is no standard finished Acorn unit as we always try to react to local demand and the site’s strengths and weaknesses. If we were to specialise in any kind of developments, it would be those with complex development problems which put most of our competitors off or by our willingness to enter into flexible partnerships. Over 50% of our developments are partnerships with landowners or introducers.
We buy greenfield or brownfield sites in urban or rural locations and we are equally happy with new build projects or conversions. We buy land with or without planning permission and are happy to look at options or planning promotion agreements.
Do you have a current "star" development that is really selling well?
We would probably consider One Lusty Glaze as our current “star” development as it was an opportunity not to be missed. It’s situated on a special and commanding location sitting above Lusty Glaze Beach in Newquay. The former derelict hotel is now a development of 36 apartments with views of Newquay Bay in one direction and Watergate Bay to the other and nine houses, six of which were sold to a housing association.
Having launched the development for sale we are currently just under 70% sold off-plan. Completion is due next month and based on current interest we expect only a handful of these new homes to still be available at that point. The properties have attracted a mix of buyers from first-time buyers (with some using Help to Buy), downsizers, second home owners and holiday let investors.
One Lusty Glaze has proved so appealing to two of our buyers, that they have each purchased two adjacent apartments which they are combining to create their ‘perfect homes’. Another buyer has purchased three apartments within the development, one for their own use and two for investment, and another of the buyers is an Acorn repeat buyer, so was clearly unable to resist our current project!
What do you think brings distinction to your new homes compared to the opposition?
Individuality, due to our flexible approach - this gives us the ability to work with a site and meet local needs. With each site we make the most of its shape and aspect to build the perfect homes which aren’t too small or too big or indeed too expensive for the local needs.
How have the local markets in your regions been performing over the last year or so - and is that performance set to continue?
Each of Acorn’s regional offices trade as a separate business specialising in meeting the local regions’ demand and profitably and they have performed well in the last year, despite different challenges.
The London market is dominated by severe shortage of land, high prices, high construction costs, difficult planning environment but very strong demand for finished product.
The Bristol region is driven by strong local demand and good regional growth. Land supply comes from the regeneration of brownfield sites and sales by our ability to provide a quality product at a suitable price.
The South West is probably the most diverse market, with high-value, prime coastal sites, which we build under our Acorn Blue banner, achieving premium prices together with lower value inland housing for the owner-occupier market.
The South is generally an affluent region driven by a very wide variety of demand from local housing, retirement homes, holiday homes and housing within commutable distance of London.
The South Wales region is dominated by employment in Cardiff and its suburbs and holiday homes on the coast.
The South West has appeal to a wide range of buyers in a way that many other regions don't - but do you have a typical customer?
It’s hard to simply say ‘yes we have a typical buyer’ but what I can say is there is a common theme amongst our buyers. Most of them tell us they had previously visited and holidayed in the South West, many of them as a child and over the years have brought their own children, and in some cases grandchildren, on holiday. The South West holds many memories for them and offers opportunities to make new memories with the next generation/s. Whether that is relocating, retiring and downsizing, having a second home or investment holiday home.
Have you seen a dramatic change in second home search since the introduction of the stamp duty surcharge?
There was definitely an increase in activity prior to the SDLT surcharge being implemented, however whilst that level of activity has reduced, that is to be expected. It has now returned to the ‘norm’ for this time of year. Buyers who want a second home will still purchase one, the only difference is the surcharge may alter the budget available to spend on the home.
How does a government scheme like Help to Buy appeal to buyers of your homes?
Like all other areas, Help to Buy enables our buyers, who may otherwise have had to spend more years living in rented accommodation while trying to strike the balance between saving for a deposit and paying rent, to step on the property ladder sooner.
What's in the pipeline from Acorn over the coming months/years?
Acorn is currently involved in the development of a large former school and its extensive grounds in Bath. The Bath site includes the conversion of a listed Georgian manor, the construction of a new build block of flats above a basement car park, three new build but different terraces of mock-Georgian townhouses, all to be built in Bath stone, and four ultra-modern low-build lateral houses set beneath sedum roofs. This is a very varied project from a construction point of view and especially so as the site is a natural slopping amphitheatre. What it does do is demonstrate our ability to construct complex projects.
We will also be working on a new project in London, which is a collaboration with a 500-year old charity, whose prime aim is to increase its long-term income and capital so they can continue with their charitable aims. We are developing a part of their portfolio and giving back to them half of the completed units and the freehold reversion resulting in the charity increasing both their annual income and the capital value of their investment. This joint venture was structured entirely to meet our partner’s needs.
Acorn Blue has a very exciting project in the pipeline for the South West called The Dunes in the village of Perranporth; one of Cornwall’s surfing hotspots and home to the UK’s only bar on the beach and the renowned music venue the Watering Hole. The former hotel site overlooks Perranporth Beach and its three miles of golden sand and the new development offers one-, two-, three- and four-bedroom beachside apartments and houses.
We have over 1,200 units in the pipeline and we hope to be constructing approximately 250 units in 2016 with a gross development value (GDV) of £85m, 290 in 2017 with a GDV of £140m and 623 units with a GDV of £350m in 2018.
Find out more at www.acornpropertygroup.org ; 020 8341 2222