Can Capital&Centric keep its cool amid red hot growth?
Co-founder Tim Heatley is keen to ensure his company remains a disruptor and maintains its edge as it seeks to make a mark in all corners of the country backed by £860m of institutional firepower.
Capital&Centric, co-founded by Heatley and Adam Higgins in 2011, is seen as one of the more in-vogue developers in the country. Much of this is put down to how it differentiates itself from others. The marketing team refers to homes as gaffs, the directors wouldn’t be caught dead wearing suits, and the business has embraced the power of social media in a way few others have. They are seen as cool, or at least cool for a property development company.
But staying cool is hard, especially when you get big. Capital&Centric’s charm is in its non-corporate nature and its founders’ growing collection of Adidas Gazelles. So does the recently established, £860m partnership with institutional investment fund Swiss Life risk softening C&C’s edge?
“We have always been a bit renegade and a little bit outside the establishment,” Heatley said. “So now that we’re kind of in the establishment it is [about] how we then don’t just all of a sudden start to comply and don’t become mediocre and don’t become safe.”
It is perhaps telling that one of the first things Heatley did after the deal was signed was drive down the street of his very first property investment; a terraced house in Salford that he bought for £65,000 and flipped for more than double that.
“I think I needed to sort of like help it to sink in,” he said.
Tim Heatley admits to being obsessed with detail. Credit: via Font Comms
An eye for detail
How a business remains true to its values as it scales is one of the trickiest questions a founder will ever ponder.
For Heatley, it is about sticking to what has got the business from survival mode in its early days to long-term certainty – much of which has been about obsessing over design detail.
“We think the external lights colour in the landscaping has to match the internal light, otherwise you’ve got a different warmth of light level outside and inside the building,” he said by way of example.
“You could ring one of my development colleagues and ask what Kelvin value a light bulb should be and they will tell you the answer.
“People go ‘why are Captial&Centric buildings nice’, it’s because we think about shit like that.”
When I ask him if he thinks he is a control freak he laughs and says he prefers to call it passion.
It not just design that has got C&C to the point a global institutional investor trusts Heatley and his team with close to £1bn. Much of the success has been about place branding, curation, and communication, Heatley said.
The language the developer uses is distinctive and undoubtedly aimed at a younger, trendier audience who might be turned off by the stuffier marketing techniques of more corporate rivals.
“Say goodbye to bland apartments with rubbish furniture and dodgy landlords,” C&C’s website declares about its Kampus development in Manchester city centre.
Heatley thinks others are starting to take notice of what C&C has done and are attempting to emulate it.
“What’s dead nice is I think we have mini versions of us that have a bit of our style, or a bit of our approach, a bit of our language.”
This is a compliment but also a reason to be wary.
In Newcastle-under-Lyme, C&C is converting a former car park into homes. Credit: via Font Comms
“I’m always thinking of who’s coming up in the lift, who are the next Capital&Centrics [that] are good and younger and cooler and edgier. That always kind of keeps me awake at night,” Heatley said.
The Impact & Places Partnership with Swiss Life and Homes England will see the funder invest in new-build schemes developed by Capital&Centric over the next decade.
It marks the beginning of an exciting new chapter for the developer, which is already spreading out across the country at a rapid pace to places including Middlesbrough, Crewe, Buxton, Plymouth, Doncaster, Hull, Stoke, Cambridge, Sheffield, Newcastle-under-Lyme, and Rotherham.
The firm has come a long way from terraced houses in Salford one factor that could potentially help the business go event further in the years ahead is having the ear of former Greater Manchester Mayor and soon-to-be Prime Minister Andy Burnham.
Heatley and the PM-in-waiting are friends and have worked together closely over the years on the GM Mayor’s Charity, which Heatley chairs. He was also one of few, if not the only, developers in the room when Burnham made his first big speech following his by-election victory in Makerfield.
“What struck me about Andy’s speech was how much of it reflected the way we’ve been working for years,” Heatley said. “It felt like a blueprint for the kind of regeneration we’ve already delivered across Greater Manchester.”
Burnham’s eagerness to see the public and private sectors work together to deliver housing and revamp high streets “would be good not just for Capital&Centric, but for the country as a whole”, Heatley added.
Weir Mill in Stockport is among C&C’s partnerships with the public sector. Credit: via Font Comms
A point to prove
C&C wants to bring its public-sector-pleasing brand of development to all corners of the UK.
“We want to be in London [and] we are not in Scotland or Wales, which is weird,” Heatley said.
While presenting an obvious opportunity to scale, the Swiss Life partnership was also vindication for Heatley, who admits he is driven by the desire to prove wrong those who doubt him and his company.
“I’m definitely not everyone’s cup of tea,” said Heatley, who describes himself as a “Northern oik”.
“One of my motivations is the haters, the green-eyed monsters, the naysayers.”
Some roll their eyes when Capital&Centric claims it spends £4m a week on regeneration. Others disparage them for their reliance on public sector money.
An example of this is in Stockport, where C&C is developing Weir Mill. Having acquired the site, the local council loaned C&C £60m to build the scheme.
“We always spend our money first,” Heatley said by way of defence. “If Adam (Higgins, Heatley’s business partner] had £4m [to spend a week] I think we’d be doing something else entirely.
“I get [the criticism] because it must be irritating. We probably inadvertently make it look easy, and it’s not.”
Capital&Centric is not the only developer to rely on the public sector to get its schemes. The option is open to others but will require them taking a longer-term view on returns, Heatley said.
“You have to be way more patient,” he said, referring to the seven-year investment horizon Capital&Centric typically takes.
Farnworth Green, a 97-home residential project delivered in a particularly viability-challenged part of Bolton, is a good example of the approach, Heatley said.
“It doesn’t make sense economically on paper, but occupancy is dead high, demand is really high, rental growth is really good, and so it makes profit, but over several years, not at day one,” Heatley said.
“I think people are impatient. When you open a restaurant, the restauranteur doesn’t walk out and go, ‘where’s my for a profit?’ [on day one].”
Farnworth was billed by Capital&Centric as a “reboot” for the area and also demonstrated the company’s ability to tap into the issues impacting local people. “We’re being picky about who we let the commercial spaces to – we don’t want to fill it with vape shops and barbers” the firm said last year.
Adam Higgins [left] is the less public face of the business. Credit: via Font Comms
The perfect foil
While patient, Heatley admits he is a hot head and relies on Higgins to talk him down from time to time.
“I’ll be out there saying I think that’s shit, I think that’s good, and I think we’re better,” he said.
“It’s passion. It probably gets misinterpreted as ego or whatever else, there’s a bit of that, I’m sure.”
Heatley and Higgins are very different characters. Increasingly, the former has become the public face of the brand while Higgins prefers to operate in the shadows, keeping things ticking over.
“Adam is far more talented than I am in many ways,” Heatley said. “He is one of the smartest blokes I’ve met, massive brain, and he’s able to harness me a bit.”
Heatley remembers the two talking for hours after work in the early days about how to overcome barriers and survive the bumps in the road that have done for many before them.
Fifteen years on, Capital&Centric is growing at a rate Heatley never thought possible. So much so that he has recently started strength training to combat the painful effects of sitting in a car for hours on end travelling between sites across the country.
“There aren’t many development companies from the North or from Manchester that have become institutional in scale and footprint so we are really proud of that,” he said.
“I feel like we’ve just managed to get to the top of the hill, and we can now start to enjoy free-wheeling a bit.”
The likelihood of Capital&Centric taking its foot off the gas seems low. That would mean relinquishing control of an ethos that has been carefully honed over 15 years. Something Heatley – the hot head, the oik, the control freak – is unprepared to do.
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No mention of the Littlewoods building in Liverpool then. Have C&C quietly pulled out after gutting the building?
By Liverpolitis
No mention of Littlewoods?
By Anonymous
An omission in the article is the fact that the C&C JV with Swiss Life also includes Homes England.
By Anonymous
When are they going to sort out the Littlewoods building in Liverpool or are they waiting for a cheque from Steve?
By Anonymous
I am a huge fan of C&C, Tim and the team. Great quality product and delivering in areas that have been overlooked for a long time. If anything the market has moved against them with too many headwinds for all developers – it’s about time the industry made it clear to the public and politicians how difficult development is in today’s world. I’m afraid to say without more government intervention, we are going to see a huge lack of new starts on site, even in prime locations.
By Ian
A lovely read, but what about Littlewoods, Tim?
By Abots
The hubris here is astounding. Are they really that different to what Urban Splash has been doing for 30 years?
By Andrew Hubrisman
Gents ignore the naysayers , envy and jealousy are two of the worst human traits, think big and you are half way there, fantastic regen projects, keep moving and make the impossible possible.
By Martin Silcock
TO be fair, C&C do tackle projects that no one else would and turn them into something pretty decent- if a little ‘industrial’ aka ‘cheap’ ! That said they certainly spin the news in their favour, when its largely tax payer money doing the heavy lifting yet the local authority’s dont seem to capitalise like they do. Make no bones about it they make sure their ‘fee’ is always covered, while its other peoples money ultimately at risk. Not a bad business model!
By JB
In fairness to C&C they are building in areas that other developers wouldn’t touch. As for Littlewoods, I think people need to look at the City Council and Mayor Rotheram for the lack of progress on that scheme.
By Anonymous
They are an Urban Splash tribute act but not anything like as genuinely authentic….
Spend less time in front of the camera, Tim…getting a bit repetitive….
By anonymous
If C&C are ‘an Urban Splash tribute act’, they’re not doing a very good job. To improve they’d need to leave buildings with construction defects and be threatened with court action by the government to recover costs like at CHIPS or as with the long running dispute with leaseholders at Timber Wharf. They’d need to abandon, rather than develop heritage buildings like Ancoats Dispensary leaving it at risk of collapse and they’d need to set up a modular housing arm only for it to collapse and leave creditors and suppliers out of pocket and sites like the Mansion House left abandoned.
So, lots for this so-called “tribute act” to improve upon!
By Pork Pie Hat
Too late for Littlewoods now – look around the country and we’ve been overtaken by other locations building similar facilities whilst we faff about as usual.
By Anonymous
Seems strange that they seem to use different contractors on each project – wonder why??
By Phil Ingham
Annonymous 12.56. Not too late at all. The point of the development is to enable the hundreds of productions already filming in the city to also use studio space and post production facilities and keep as much as possible in the city. Filling on location in the city and then doing the studio or post production work in Middlesborough is no different to them doing it in London now I. E. Still costs more and is harder logistically. Productions are being filmed in Liverpool more than ever because of the architecture, geography and film office. None of these are or can be replicated elsewhere, hence why the productions come. Little woods needs taking off Capital and centric and handed to somebody else. It does not do or match up what they do and all of the remediation money they were granted should be claimed back because they have done little to the site of any note.
By Anonymous
Agree with Anonymous 12.56. Littlewoods is just a sea of scaffolding,largely an expensive irrelevance now. The world has moved on and new Studios are opening and have opened in the North West like the Massive Space Studios that did house of Guiness or Versa Studios or Media city. Film work can make and take stock footage anywhere , the actual work is done elsewhere. Still it could have been a nice building again but the business case has been eaten elsewhere.
By Anonymous
Littlewoods too little too late like Baltic Station and eventually The Kings so called skyscrapers
By Anonymous
C&C have done some great work over the years restoring and converting some of the massive old mill buildings around Manchester. That’s difficult and expensive work but worth the huge amount of effort. Pity about Littlewoods but that’s largely because the business climate has changed and that was far more niche. Maybe apartments now..it’s handy for Starbucks around there !
By Anonymous
For all of those naysayers about Little woods, you clearly don’t understand the idea behind the studios. The business case IS there, just not for Capital and Centric and the way they make their money. Saying work can be done in Salford or other new studios is no different to saying it can be done in studios that have existed in London since the 30s or even abroad, and is totally at odds with the reasoning behind the proposals in the first place. Stealing a march on other new studios opening makes no odds unless you are talking about getting a full time occupier like Netflix, which as nice as that would be, is not the purpose. The point of Little woods is to encourage productions to not just do the location filming in the city but also do studio work and post production. Doing as much as possible in the one location is a big money saver on ever tightening budgets. These studios not existing or Elstree actually existing for example has not stopped any film spending days or weeks in the city and using Liverpool to stand in for New York, London, Chicago, Moscow, or even Gotham city (amongst many others). What has happened is studio filming and post production have always gone elsewhere. These studios would encourage productions to do the other aspects in Liverpool so a new studio in Salford or somewhere else will not make the slightest bit of difference unless they are also building a perfect full scale replica of Liverpool as part of the studio. I would suggest a different type of development needs to be put in place with a LATC used by Liverpool City Council or the city region. C&C clearly want to sit on this until they can redevelop it into something that fits their own model and don’t care about the studios or city. Money has already been invested by the authority so they should reap any rewards by getting any unspent money back and using a CPO. Surely a breach of condition has occurred with the total lack of anything other than knocking down the tower and clearing away some rubble.
By Anonymous