Martin Ainscough’s crane hire millions are supporting a business quietly making strides in land acquisition, reports Neil Tague.
Unassuming locations are a good sign of a business that doesn’t fritter cash, and Ainscough Strategic Land’s (ASL) headquarters – “Is that the old youth club?” muses my taxi driver – at the back of a Leigh estate fits the bill. Inside though, it’s airy and stylishly fitted out. And there’s some serious weight parked up outside.
ASL is in a nice position. Essentially it is capitalised by the sale of Ainscough Crane Hire in October 2007, which netted Martin Ainscough and his brothers Brendan and James £180m, and was set up to buy sites with long-term potential. Nigel McGurk, who set up land divisions for Countryside and Wilson Bowden before being headhunted by Ainscough after a chance meeting at an Old Trafford dinner, heads the operation.
“We’re not saying we’re going to change the world. The nature of the business is longterm investment,” he says. “The core of the business is adding value over a long period of time and we’ll only be successful by creating partnerships with the public sector and local communities. There’s been a shakeout over the past couple of years and there are fewer people like us, who aren’t confined by a 12-month accounting cycle, in the market.”
Who else is in this game? Not many. McGurk says: “There are very few who’ve stayed with strategic land. They generally get bought or do different things.”
The likes of Crest Nicholson, Quintain, Countryside, St Modwen, Harrow Estates and Northern Trust, most of whom combine development with longer-term land plays, can or did have the capabilities.
He adds: “We’ll look at what others might consider problem sites, but they break down into two areas: regeneration in a broad sense, or the creation of new communities on greenfield land. We want to spread risk in terms of location and the sort of product.”
Why strategic land? Ainscough’s first entry into the market was in the early 1990s when he bought a 43-acre former bus depot in Leyland, turned some of it into a business park and used some as a crane depot.
“We looked at enhancing the value, got a planning consent for retail and now we’re going through planning to put housing on the rest,” says Ainscough. “I built a limited knowledge of industrial property, but I surround myself with experts. When we sold the crane business we retained all 25 sites. I decided property was a good way to go. Now, if you don’t have your own money you can’t do this because most of what we buy is not incomegenerating. We’re cautious about which sites we buy and two years in, I’m delighted.”
McGurk says: “Our strike rate’s low – we’ve bought six sites, having looked at 500-plus. What’s struck the people we work with is that we enjoy the problem-solving – we know it’s about taking time to understand the needs.”
One scheme is Dolgarrog in rural North Wales, a former aluminium factory site. The site was bought from administrator KPMG in July 2008 and a community consultation has been started. “It’s where a strategic land business earns its corn,” says McGurk. Ainscough adds: “Because we’ve got a passion to make the money work for these places and make a profit.”
ASL has set up community boards in Dolgarrog, and done work on its Lancashire scheme, setting up the Leyland Board with backing from South Ribble Council. Forty acres have been bought in Bishop Auckland in the north east for an urban extension. Closer to home there’s a 48-acre former Nestlé site in Cuddington, Cheshire, which includes 18 acres of brownfield land. It will be cleared for a mixed-use development.
In Merseyside ASL is in talks with a developer about one of the regional development agency’s employment sites; and the Junction Business Park in Swinton, bought 18 months ago, looks a handy fit for the major industrial sites within the M60 that inward investment agency MIDAS is keen to bring forward.
What of the future? Ainscough says: “We would expect to double the portfolio over the next year and have been helped by the plc housebuilders focusing on reducing debt rather than acquisitions – we think they’ll look for oven-ready sites and we’re prepared to look at all angles.”
Also in: December 2009
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We’ve called this year’s annual round-up a rollercoaster ride. And although for most people it has seemed just a rotten year, one that many are glad to see the back of, we feel justified in using such a metaphor. The year has provided highs for some, and though the ride still feels rocky, most businesses are over the shock induced by the banking collapse of October 2008.
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