Features
7 Nov 2019 04:24pm

Making a splash

Property developer Urban Splash has been changing the face of Britain’s cities for more than 25 years. David Adams speaks to its CFO, Julian Curnuck, about the challenges and rewards of saving the old and building the new

urban splash 630
Caption: Photography By Helen Roscoe

Human civilisation will never be able to create the perfect city – urban environments must keep evolving to meet the changing needs of society. If there’s no building work under way in a city, that’s a bad sign. But the need to renew and rebuild doesn’t mean that anything old should be discarded. Arguably the most interesting and practically useful changes seen in UK metropolises over the past 20 to 30 years have involved the renovation and adaptation of existing buildings, giving them and their immediate surroundings new life and purpose.

If you have spent much time in Sheffield, Birmingham, Plymouth, Liverpool or, above all, Manchester in the past 15 years, you will have almost certainly admired the work of Urban Splash, which has made a major contribution to the revitalisation of the centres and former industrial areas of these and other cities. In more recent years the property developer has invested in a series of joint ventures that have extended the scope and scale of its work, including a move into the production of modular housing components, now supported by a partnership with Japanese housebuilder Sekisui House. In 2018 Urban Splash published a beautiful coffee-table book and launched a touring exhibition to celebrate its 25th anniversary.

Both book and exhibition were called It Will Never Work, which the company’s co-founders, Tom Bloxham and Jonathan Falkingham, say was what people kept telling them during their earliest projects. In 2008 it almost didn’t work, when the financial crisis struck and the business was forced to rebuild itself. One person who did as much as any other employee to ensure the company survived this crisis is its chief financial and operating officer, ICAEW member Julian Curnuck, who joined the company in 2005. Prior to this he had worked with Arthur Andersen for 11 years, which he enjoyed very much; and for Deloitte for three years, which he enjoyed less.

In 2005 he decided to move out of practice and away from the corporate world, hoping to find a job as finance director for a smaller business. “But I discovered that it was very difficult to become an FD when you’ve never been an FD before,” Curnuck recalls wryly. “I needed someone who was going to take a risk on me. Fortunately, Urban Splash was recruiting on the basis of attitude and aptitude, as opposed to recruiting on a CV. “I wasn’t a property expert, but I knew about the company – they were already known within Manchester as a very cool company to work for.” The company’s origins lie in Manchester in the early 1990s, when Bloxham ran a music and posters stall at Afflecks Arcade, an indoor market housed in a disused department-store building in the city centre.

After realising he could make more money subletting stall space than selling merchandise, Bloxham sought to create a similar market in a group of disused warehouses in central Liverpool that he was able to acquire at a low price. He called the market Liverpool Palace and let some of the buildings as low-cost office space to entrepreneurs, artists, designers and musicians. They included indie band The La’s and a young designer called Wayne Hemingway. Bloxham was developing a knack for creating cool places. He then met Falkingham, a newly qualified architect who had set up a practice with his brother Miles in Liverpool. Bloxham and Falkingham joined forces to create a new bar next to Liverpool Palace. Built for just £70,000, using a no-frills, exposed building-fabric style that has been copied endlessly since, Baa Bar was an instant hit and became a Liverpool nightlife institution. Bloxham and Falkingham shared a vision of using the many decaying industrial and commercial buildings scattered throughout cities such as Manchester and Liverpool to create a British version of the vibrant urban districts found in the centre of cities outside the UK, where people could live, work and relax.

This is something that most UK city dwellers now take completely for granted, but it seemed like an outlandish, commercially dubious idea during the early 1990s. Urban Splash started to make it happen. The company’s next project was the conversion of a former chemical factory in central Liverpool into loft apartments, with a new public square in front of the building. They called it Concert Square. Within a year of its completion it was one of the most fashionable locations in the city. Throughout the 1990s and the early noughties, Urban Splash created fantastic new spaces for homes and businesses in forgotten and neglected buildings, and then in completely new buildings too.

As lead developer, working alongside the celebrated architect Will Alsop, it also led the creation of New Islington, a flagship development between two canals on the site of the rundown Cardroom Estate in Manchester. This was the cool company Curnuck joined in 2005. “It was fantastic: there was a very steep learning curve, but it was very enjoyable – there was a real energy and excitement about the place,” he says. Most employees were aged under 30 and the company was opening new offices in Birmingham, Plymouth and Bradford.

Projects started during this period included the rebirth of the extraor - dinary curved, white, art deco Midland Hotel on the seafront at Morecambe in Lancashire; and the repurposing of the palatial former Royal Navy buildings at Royal William Yard in Plymouth docks, which now house restaurants, galleries, shops and event venues. Urban Splash also began the first phase of redevelopment at Park Hill in Sheffield: a unique, sprawling development of linear residential blocks built in the 1960s in a Brutalist architectural style on a hill above the city’s main railway station. The original architects hoped its high-rise walkways – tall and wide enough for a milk float to drive from one doorstep to the next – really would form new streets in the sky for the people who lived there. But by the 1990s, decades of neglect had given Park Hill a terrible reputation.

Its vast, decaying buildings had become a baleful, threatening pres - ence; a constant reminder of failed urban planning. There was widespread incredulity in Sheffield when the buildings were listed in 1998. But a decade later, Urban Splash joined English Heritage in spearhead - ing a major refurbishment project, which is still under way and will continue until 2022. It will eventually offer 35 different types of apartment, for rent, shared ownership and sale, alongside new shops, leisure and community facilities. By 2008, Curnuck recalls, there were around 40 projects in the pipeline and the company was spending £8m a month on construction sites.

“It was a fast-growing business, but, with the benefit of hindsight, it was not as well prepared as it could have been for the scale and speed of its growth,” he says. “It all came crashing down in 2008.” With the company effectively awaiting income from around 2,000 unsold homes and other pipeline assets, the property market slumped and banks stopped lending money. Urban Splash was carrying debts of more than £250m. Its survival was based on careful management of its residential and commercial portfolio and rais - ing £50m in finance used to complete residential schemes in Leeds, Manchester and Bristol, and the first phase at Park Hill. Sales grew, painfully slowly. For two years, every working week began with a meeting with the company solicitor to confirm that the business would survive for the next seven days. “I was the accountant in the business – I did all the financial forecasts; I did all the reporting to the banks,” says Curnuck. “It was incredibly stressful.

“The first job of the month was to worry about paying the payroll at the end of the month. It took about nine months to get to a position where I could sleep properly at night and didn’t think we would go bust. We relied on a trickle of funding from the banks. We limped from milestone to milestone. “But the more we did that, the more confidence we had – and the more confidence the banks had in us. I think it was that sense of working with people, rather than against them, which got us through, as well as thinking creatively. “We had very resilient staff. Everyone just mucked in. It was a case of people saying, ‘Right, we believe in this business, we like working here, let’s roll our sleeves up and get it done.’”

One important step forward was the creation of a joint venture with property manager/developer and former housing association Places for People, which bought 654 residential units from Urban Splash for £77m in 2013, while also paying the company to continue marketing and managing the properties n 2014 Urban Splash refinanced its remaining debts and formed a joint venture with another property company, the Pears Group, to manage 35 assets, including a major project, the Fort Dunlop complex in Birmingham, a familiar landmark to anyone who’s driven through the city on the M6.

“One of the consequences of the recession was a move to work more on joint venture relation - ships,” explains Curnuck. “Previously, we relied on residential sales and commercial property sales. We now have our joint venture with Places for People; and we earn management fees from our work with Pears and asset management fees on the commercial side. Profits from residential sales activity come in on top of that. “We now have a family of companies. We have a residential fund, we have the original Urban Splash company, and we now have a demerged new-build housing business focused on modular housing. We’re building larger schemes – we’ve done schemes in the past that may have had more homes, but in terms of scale and area this is completely different. These will be new cities and neighbourhoods.”

Those new neighbourhoods include Port Loop in Birmingham, where homes built for the first phase of the development, on a former industrial site surrounded by canals, are modular townhouses of between 1,000 and 1,500 square feet with internal layouts customised by their owners. Earlier this year, Sekisui House bought a 35% stake in Urban Splash and invested £22m in a new joint venture, Urban Splash House Holdings. This has increased capacity at Urban Splash’s modular homes factory at Alfreton in the East Midlands, which will now build 2,000 modular homes a year. The UK government’s housing delivery agency, Homes England, has also taken a 5%, £3m stake in the new entity and provided a debt facility worth £27m.

“The important thing now is that we’ve got very experienced partners working with us, and that will enable us to grow quickly, but in a much more controlled way,” says Curnuck. “That means we can achieve more.” Headcount had reached 136 in 2008, then fell to 56, but is now over 100 again, in 2014 Urban Splash refinanced its remaining debts and formed a joint venture with another property company, the Pears Group, to manage 35 assets, including a major project, the Fort Dunlop complex in Birmingham, a familiar landmark to anyone who’s driven through the city on the M6. “One of the consequences of the recession was a move to work more on joint venture relationships,” explains Curnuck.

“Previously, we relied on residential sales and commercial property sales. We now have our joint venture with Places for People; and we earn management fees from our work with Pears and asset management fees on the commercial side. Profits from residential sales activity come in on top of that. “We now have a family of companies. We have a residential fund, we have the original Urban Splash company, and we now have a demerged new-build housing business focused on modular housing. We’re building larger schemes – we’ve done schemes in the past that may have had more homes, but in terms of scale and area this is completely different. These will be new cities and neighbourhoods.”

Those new neighbourhoods include Port Loop in Birmingham, where homes built for the first phase of the development, on a former industrial site surrounded by canals, are modular townhouses of between 1,000 and 1,500 square feet with internal layouts customised by their owners. Earlier this year, Sekisui House bought a 35% stake in Urban Splash and invested £22m in a new joint venture, Urban Splash House Holdings. This has increased capacity at Urban Splash’s modular homes factory at Alfreton in the East Midlands, which will now build 2,000 modular homes a year. The UK government’s housing delivery agency, Homes England, has also taken a 5%, £3m stake in the new entity and provided a debt facility worth £27m. “The important thing now is that we’ve got very experienced partners working with us, and that will enable us to grow quickly, but in a much more controlled way,” says Curnuck. “That means we can achieve more.”

Headcount had reached 136 in 2008, then fell to 56, but is now over 100 again, not including employees at the modular housing factory. Curnuck’s role has also changed. “I’ve got some very good people around me, so I can take a slight step back to focus on the strategic growth of the family of businesses. It’s a different role: less hectic, but just as busy.” After 14 years, he is still very happy he joined a company that he believes has done so much good, through regeneration of the urban environment and by creating high-quality homes and places where businesses and other organisations can thrive. “To be associated with a business that does good things is very rewarding,” he says. “Urban Splash has a unique DNA. It was there when I joined, was there in the recession and is there now. That’s what has enabled us to grow again and attract new investment. It’s not just the ideas we have that our investors are buying into; it’s what the company represents.”



 

Topics