Hi, Damien. How are you?

 

I'm very good, thank you; quite excited as we have moved into a newly refurbished office this morning. 

 

Oh, fantastic. Your own work, I presume, was it?

 

Yes, all our own work. We've grown quite substantially as a business over the last four or five years. We refurbished our existing space to create more meeting rooms and a more flexible working environment and as a space it's more on-brand.

 

So how were you, as a client to yourself?

 

(Laughs) I think almost 30 developers trying to design and build their own office space is a little bit of a recipe for disaster! We thankfully have ended up with a great office space that we're all very proud of this morning.

 

Great. Do you want to introduce HubCap? Because it's a fairly new venture, isn't it? You launched, I think, with three retrofit projects in London and in Edinburgh.  So, what's happened since the launch, and how has it been?

 

Yeah, sure. So, we set up the HubCap business almost two years ago. And the background to HubCap was through the HUB business we were seeing more and more opportunities in existing buildings becoming available, particularly in the office market. So, we decided to set up a business that was focused on low carbon urban living, in key UK cities. And what we mean by that is you have a lot of what we call stranded assets in places like the City of London, Edinburgh, Oxford, Cambridge, and York. These cities that people actually want to live in. But currently the living is quite constrained. So as a solution, we believe that these office buildings could be converted into living spaces. So, whether that's co-living, apart-hotels, BTR, or student accommodation. So, we set up the business to focus on that. It's been hugely successful so far – it's a space lots of our funding partners want to be in. It's a space that lots of local planning authorities now support; they’ve been left with these buildings, particularly office buildings, you know, EPC, B-rating, poor thermal performance, poor accessibility, poor fabric performance, etc. And these buildings have no use or no purpose in the long term. So, the idea of taking them, and very carefully converting them into homes, is seen as a good, viable solution. So, we started off by acquiring two of these existing assets in Edinburgh. We then acquired two in London, and we're about to acquire our fifth and a third existing office building in London in the coming weeks.

 

Fantastic! And how do you view the market in the capital at the moment - specifically London?

 

I think the market is challenging at the minute, for all the obvious reasons I don't need to explain. We've still got inflation, the cost-of-living crisis, high interest rates, things are challenging, but there's always opportunities. And we're seeing a lot of opportunities at the moment in the living space. There are still issues – demand for homes, whether that's homes, your co-living, student, BTR – there's huge, huge demand, and we need to build more, and we need to build more, quicker. And you know, the HubCap approach in taking an existing building, not only is it the right approach from the ESG point of view, but it does speed up the delivery of these homes. You know, we're taking an existing building, we're retaining the existing structure, and designing homes to work around that. That means we deliver these homes faster, with obviously a much lower impact on our environment.

 

So, tell me about this Engineer Pitch you did recently that was won I think, by Simple Works. What was that all about? And what was it that they put to you that you went for?

 

We see lots of existing buildings. We see maybe 20 of these, you know, whether it be business generation meetings we have a week, but not every existing building can be converted into residential. So, the huge amount of work we do on these buildings to understand: are they suitable for conversion? You know, the depth of the floor plan, the proximity to neighbouring buildings, the condition of the structure, the floor to ceiling heights. With all of that, we find ourselves engaging with structural engineers at an earlier stage than we ever have done on the larger HUB projects. Because we needed that input, it was absolutely vital. Typically, we would go and talk to an architect, the architect would draw the scheme, we'd run some numbers, and we would move forward to a full DD process. But with HubCap and existing buildings, the importance of the engineer was greater than ever. We decided, in order to celebrate the role of the engineer, and also for us to learn more about what engineers can do, and how they can help, we ran the Engineering Pitch. And the purpose was to identify engineering practices who could work with us on our projects going forward. We set them a brief; we gave them an example of one of our buildings that we had recently acquired. And we asked them a number of questions from how could they assist us during the DD process to give certainty in terms of what we were buying? And then, how could they work with us to very carefully convert this building into living space? We had a range of pitches. We had a number of parties enter the competition initially; we then had the very difficult task of narrowing that down to seven engineers to pitch, and on the evening, they only had three minutes to get their message across, which clearly is very challenging. But the calibre of the presentations was really impressive. And it was a very difficult choice to select the one engineering practice.

And what was it that pushed them ahead?

 

I think Simple Works came in with a very clear pitch; their presentation skills were really impressive. Secondly, they had a really clear message in the three minutes. And they kept it very simple; they took it back to basics. When you acquire a number of these buildings, is there a way of looking at the circular economy? Is there a way of removing materials from one building and putting them into another building? I think a lot of what was presented isn't realistic today. Because there isn't enough collaboration in our sector, as of now, for developers to work together to be able to make the circular economy work across a large number of projects. But we really liked the concept. And we really liked the fact that they were pushing boundaries, but also being realistic about what we could achieve today.

 

It's quite an unusual process for getting some ideas, and choosing a partner, this one. Are you going to do another Engineer Pitch in future?

 

I think so. We had previously run two Archiboo competitions which were selecting architects to work with us on projects. So, given the success of the Engineering Pitch, I do see us running a version of it again. Maybe next time, it might be mechanical and electrical engineers – we may change the discipline, but the process of getting to meet new practices, and understanding how they work and how they think, is really important to us. You know, out of all those engineers in practices at pitch, we've now met them all. And I suspect we'll be working with at least three or four of them over the coming year on projects.

 

You're an architect yourself, aren't you? How has that been in the role that you have now, going to the other side, as it were? Has it been a boon to you, having that training?

 

Yes, having an architectural background, I think it's a huge benefit. Within the HUB business I'm not the only one with an architecture background. We've got four others in the team that are fully trained architects; we've also got planning consultants, structural engineers, building surveyors. So, the team here at HUB is made up of people with consultancy backgrounds, and bringing that combination and that skill set together in house, I think, enables us to do things in a really quite unique, but a really, really good way. We understand typically how buildings should be designed and how they get built. Here at HUB and HUB Cap we build out all our buildings, so the importance of delivery from day one is absolutely key. So having that kind of people that think in that way is hugely important, but also the emphasis on design quality. We're big believers here that good design doesn't necessarily cost more money. It just needs a little bit more consideration, and a really talented professional team. Hence the reason we run competitions like Engineering Pitch.

 

One final question: we've got a general election around the corner. What are you expecting in terms of help on housing, if anything?

 

I think housing needs to move up to the top of their agenda. You know, whatever government we have next, the importance of housing, clearly, there's a huge need right now. There's a huge need for homes that are affordable, both to rent and buy. But in the shorter term, I think the thing that the government can do to help us for one prime example would be VAT on conversion of existing buildings. You know, the idea that we're currently penalized for retrofitting a project feels all wrong. We should be incentivized to take existing buildings and existing structures and convert them into living, not penalized. So, I think in the short term, these are changes that are needed immediately. And then, longer term, I don't particularly want to start talking about the planning process. But we need to see a smoother, faster way of delivering more homes here in the UK, or the crisis is just going to get worse.

 

Brilliant. Well, let's hope for those changes. Fingers crossed, I guess. Thank you very much for spending some time with me. And congratulations on the Engineering Pitch and I hope there's another one coming around the corner.

 

Thank you very much, David. I enjoyed our conversation. 

 

Cheers Damien.

 

Thank you. Bye, bye.