We take a look at property entrepreneurism with Will Herrmann of developer West Eleven, who tells us about what led him into the industry, what he is doing in today’s competitive new homes market and his ambitions for the future.
Hi Will, where did your property career start?
I accidentally got into property at university. It was in those wonderful days when you could say you could afford it and the bank would give it to you, regardless of whether you were a penniless student or not. I was doing Mechanical Engineering at Bristol, needed somewhere to live and I found five bedsits. I bought them, turned them into a student house and lived for free for two years. I made quite a lot of money out of it − probably still the best deal I ever did! − and I got the bug.
I presumed I was destined for The City, left university and decided on an adventure first, so I bought a Land Rover and drove to Cape Town. I came back nine months later and unsurprisingly, the job I thought I had was gone. We had a family business making manufacturing products, particularly really high-end joinery, specifically relating to doors, so I went to work there while I was looking for a job.
Was this a job in skills or management?
My masters degree was in process systems and lean manufacturing so I went to work around the factory with my dad. I ended up running the whole business with him and was there for eight years. It was an amazing learning experience because family businesses are a unique environment. In 2010, Dad was thinking about retiring and I didn’t want to take over the business. These were pretty tough times for our industry so we took the decision to close the business down. It was business in its rawest form, but an incredible learning experience that still sticks with me now.
I’d been property developing on the side all the way through that and thought: “This is my opportunity”. I love building and I love deal-making, so it seemed like the perfect thing to do. I love it when someone tells me something is impossible, then I go and work out how to do it – hence my love of awkward sites. I had a challenge from my dad to start a business with no money. I started my company with £30,000 − which if you want to do property is essentially no money − and I went to see what I could find. I started by finding a flat where I thought you could add space, and it worked quite well. Quickly we met some quite innovative, niche-interest property funds. The first we borrowed from was Zorin Finance, run by Luke Townsend, who was just starting his business then.
What has inspired your business growth?
I’ve found a lot of kindred spirits along the way. We grew from doing individual flats into doing houses but in the area of London where we were operating, the market never really died and people were still really desperate to buy. If you start to understand the buyer, you can start to deliver a product to them. The days of building piles of white boxes for overseas investors or desperate local buyers are gone – you have to deliver something better than everybody in the immediate area.
We’ve built strong alliances with some amazing designers and architects. It’s important that all our buildings are architecturally significant, interior design needs to be amazing − award-winning if we can! − and we need to create homes that people can really imagine living in: an emotional connection between the buyer and what we are selling. We’ve now managed to do that on a number of projects and sell above the local average because we’ve created something special, it’s not run-of-the-mill.
Has ‘instinct’ been an important factor in what you’re doing?
It all starts with instinct. If I look at a site, before I’ve even done any analysis on it, I’ve got a pretty good idea if it’s going to work. After that, you’ve got to have the finance and the numbers, because ultimately you’ve got to walk into the bank and sell it to them! Otherwise you’re never going to build it.
Are all these things you do yourself?
It was just me for a long time, but West Eleven is growing now. I have a consultant chairman − my ‘moral compass’, as he would describe himself! He helped my grandfather build a multi-national watch business in the 70s and early 80s. He’s an accountant, now 84, and we meet once a week for coffee and we have more formal meetings once a month.
I’m so lucky that I work with people who blow my mind on a daily basis. Our architects are phenomenal, our interior designer is mind-blowing, the creative guys generally that we work with are exceptional. I stay away from wordy formal briefs and instead explain the idea and the context verbally so they get the essence of what I’m looking for. I wouldn’t enjoy my work as much as I do if I didn’t work with these incredible people at every level.
How do you approach a development such as your latest, The View?
We’re not in the business of land-banking – if we buy somewhere we’ve got to start adding value to it from the day we acquire it. The View is a case in point. Wandsworth Council identified a corner plot as a development site, retained it and then tried to sell it. They had a planning brief for nine flats, I went to have a look and thought they’d got it wrong. I got my architect on board and we said: “We can do more here”.
I went to the school next door to the site and said we were going to be neighbours, we want to be the best we can, what do you really need. They took me around the school, which was falling to bits, and said what we really need is £2.5m capital for improvements, or we could do with a new sports hall. We’re now building them a Sport England sports hall, and have changed the design of an area of the school building to make a flexible boundary, so it’s a sports hall for the school during the day, and in the evening the caretaker unlocks another set of doors to use it as an amenity for local people.
We negotiated with the council and in a first for Wandsworth, and I think a first in London, the affordable housing in our building has a priority for the teachers of the Harris Academy, as one of the biggest problems they face is retention of staff because if the cost of living in London.
We went back to the council and said we can do all this but it’s quite expensive so we’re going to need 15 storeys and 39 flats and they said yes, we can live with that. It’s our biggest project to date.
On the 13th floor is a huge roof garden designed by Randle Siddeley, the Chelsea landscape architect, just shy of 3,000 sq ft with little zones, seating areas and sunbeds. It looks north across the park and it belongs to everybody, from affordable tenants to penthouse owners. Everybody in the building will get Zipcar membership as part of their purchase, there’ll be electric Zipcars in the building; they get cycle hire membership and there will be ‘Boris bikes’ in the building; and they get two years of taxi vouchers.
Can you tell us about the bespoke marketing app you’ve created for The View?
You have to get people to make an emotional connection with your building if you want them to buy, especially at a premium. The challenge is even harder if you’re selling off-plan − how do you get them excited when they’re telling family of friends about it?
I got a bit obsessed with Pokemon for a short time, the AR (augmented reality) side of it is amazing. At the same time we were spending a fortune on an architectural model that people have to come to you to see. I thought there must be a better way of doing this, we’ve got all this architectural data, can’t we just make something better? So we found some developers who wrote games for iPhones and we launched it to the trade at MIPIM. We’re the first people ever to put AR into the App Store. Search “The View AR” there and you’ll find our app and you can download it and interrogate our building in HD − and walk around a near-lifesize model! It effectively projects it onto the floor or table in front of you, to make it up to 18 feet high! It can show what it looks like day and night, expand it, look at it from many different angles, through the windows, stand on the roof terrace and look inside.
Rather than look at the building in a linear way, through a brochure, we go to the bit we find exciting and it gives us more information about that part of it. We’ve had 1,000 downloads without talking about it, advertising it or launching it.
How have your technical and marketing skills adapted as the business has grown?
It’s been amazing, every day. It’s the most exciting thing in the world! The degree and masters I took were about problem solving, and the biggest thing I took from them is taking something you don’t know about and breaking the problem down into pieces until you can start resolving bits of it and in the end, you solve the whole conundrum.
Now, I’m trying to employ people to bring a bit more order into my life, I’m a bit chaotic sometimes! There are a lot of ideas and things going on, projects and side projects, so we’re strengthening our office team at the moment. I now have a PA who’s the most wonderful person in the entire world, and we’re taking on a development manager who will be responsible for delivering projects and helping us assess projects and we’re taking on an FD for a two-day-a-week role for fund-raising and fund structures.
What are your ambitions?
I always aim to manage cash and cover risk as we grow. I’m looking into operational businesses, I’m interested in the leisure sector, absolutely fascinated by co-living, Build to Rent-type offerings − I don’t think they’re right and I think there’s an opportunity in the market. There’s a project I’m working on with a few people where I think we can be a disruptor in the market. I don’t think Build to Rent sits very well with the British psyche of homeownership and I think that’s going to be a real barrier to Build to Rent growing. There’s a concept that, if we can make it work, we think will address quite a lot of those issues. And I want to be less London-centric.