Mark Homer shares the inside story of his largest and most complex commercial conversion project to date - transforming an 80,000 sq ft former Marks & Spencer department store into 99 residential units. He reveals the highs and lows behind acquiring the property, handling the intricate planning permission, dealing with the main contractor going bust halfway through construction, and stepping up to build it himself.

KEY TAKEAWAYS

• Mark acquired the M&S property once he confirmed a national retailer was interested in the ground floor space. This substantially reduced his risk and unlocked the opportunity.
• After his initial main contractor went bust, Mark set up his own building firm and hired the existing site manager and subcontractors. This saved significant cost and gave him greater control.
• Strong health and safety processes including regular independent audits were critical for managing risks during construction. This documentation also proved invaluable when scrutiny arose.
• Gradually gaining experience across different commercial conversion projects enabled Mark to handle a development of this scale. It's not advisable to dive into a huge site as your first project.
• Doing the project himself rather than using a main contractor saved around 20% of costs (£2 million) and eliminated variations which can be painfully expensive.
• The building qualified for a government-backed bond which provided exceptionally low long-term finance to hold the flats. This rewarded his ambition and enabled him to retain ownership.
• Mark always seeks creative angles to de-risk acquisitions and reduce base cost. This might involve creating optionality around alternative uses, or leveraging tenant demand

BEST MOMENTS  

"Just graduate your way into it. I don't subscribe to this view of oh, it doesn't matter how big it is you can just dive straight in from day one on a massive project because you know you'll make a lot of mistakes and they'll be magnified on a big site"

"By doing it myself, I think we saved at least £2 million So, that was worth that. It's about 20%? Yeah, probably. A little bit more? Yeah. That's interesting."

"You really need to buy the whole building to make anything work"

VALUABLE RESOURCES 

https://www.youtube.com/user/progressiveproperty https://www.progressiveproperty.co.uk/the-progressive-co-founders/

ABOUT THE HOST

Mark has bought, sold or has managed around 1,000 property units for himself, Rob, his family and his investors since 2003. He is a system and spreadsheet geek and has developed a complex, confidential deal analyser system of buying residential, commercial and multi-let properties.

CONTACT METHOD

Email: Markhomer@progressiveproperty.co.uk

LinkedIn: https://www.linkedin.com/in/markhomer1

Facebook: https://www.facebook.com/markprogressive

Twitter: https://twitter.com/markprogressive