In an interview with REM TIMES, Stuart Leslie, International Sales and Marketing Director, Barratt London, speaks about the organisation’s successful journey over the years
Barratt Developments plc has embarked on an extraordinary journey since its inception in 1958. It all started with Lawrie Barratt, the company's founder, constructing his very first home and today, it has evolved into the UK's largest and most renowned housebuilder, setting the industry standard in construction, design, quality, and customer service. Over several decades, Barratt has contributed significantly to the housing landscape, creating more than 550,000 homes across England, Scotland, and Wales.
In an interview with REM TIMES, Stuart Leslie, International Sales and Marketing Director, Barratt London, delves into the reasons behind the organisation’s tremendous success in the UK, its relationship with the GCC and much more.
Q1 Give us an insight into the growth of Barratt London. What are the reasons behind its success across the UK?
Throughout the company's rich history, we have remained committed to prioritising the customer in every element of our operations. In the last four years, our business strategy has changed. We have moved from developing luxury products in London’s central zones to focussing on the capital’s outer zone, predominantly those in three to five, where we are seeing a better opportunity to regenerate brownfield and large industrial regeneration sites that are under-utilised, with a focus on bringing volume housebuilding to London at a price point amenable to a larger audience. Traditionally, we would sell to first-time buyers and family owners, but we are now seeing a lot of investors looking at these high-yielding properties, particularly from international markets, as it is a very attractive asset class for them.
Our success can also be attributed to the enticing payment plans we offer, requiring only a 10% deposit with the remaining 90% upon completion – this also underscores our assurance of delivering quality products. By capitalising on masterplan regeneration hot spots, we strategically drive the highest rental yields and capital appreciation for our clients. Additionally, our strategic land partnership with Transport for London has further enhanced our ability to develop properties within optimal locations with excellent transport links, thus creating superior rental yields and capital appreciation.
Q2 Your team recently undertook a tour of the Middle East. How was the experience?
We took the Barratt London portfolio to Saudi, Kuwait, UAE and Qatar. The response has been robust, particularly from an investment perspective, as the Barratt portfolio gives a great opportunity for clients to enhance their existing portfolio while also achieving excellent rental returns, where we are consistently achieving between 5.5% and 6%, a figure significantly above our competitors in the market.
The price point of our properties also piques the interest of prospective clients. At between GBP 400,000 and 600,000, we provide an excellent entry-level that reduces risk in the market, with many investors buying more than one. Previously, they may have bought one property for GBP1 – 2 million, but they will now spend the same money and purchase three or four properties, which we have observed in the Kuwaiti and Saudi Arabian markets. Each GCC country has its reasons for investing in the UK. It has a 100-year legacy as an investment asset, is safe from a legal perspective, is going nowhere, and has a steady growth pattern.
It's also worth noting that we have been coming to the Middle East for some time, and many of the people we are speaking to are repeat buyers and people who have bought from Barratt before. Saudi buyers are purchasing second homes for their families to live in and Kuwaiti buyers more so for investment. However, the trend seems that a larger population can buy property in London because the price point is more affordable and alluring.
Q3 Have you seen a growth in the number of investors from the GCC?
We have seen significant growth since starting our partnership with Hardington Residential, our local representative here in the Middle East. Global investors, from the Gulf Cooperation Council (GCC), have long been drawn to the vibrancy and opportunities it offers.
Renowned for its strength in the face of economic challenges, London's real estate market offers a compelling investment proposition with a range of facets, making it a top choice as an investment vehicle for GCC investors. It is dynamic, and one of the key areas of interest for investors from the GCC is the city's regeneration zones. Properties within a 750-metre radius of these zones tend to yield higher returns, with an average annual growth rate of up to 3.6%. Several of these regeneration zones have become particularly attractive to Middle Eastern investors due to their promising investment prospects.
We are also exploring opportunities within Egypt and expect considerable traction there. The other market is Africa, specifically Nigeria and Kenya. We are, however, very focussed on the GCC market, and excited about the opportunities it has to offer.
Q4 How sustainable are your developments?
We are recognised as the leading national sustainable house builder and have been awarded ‘Sustainable Housebuilder of the Year’ among other sustainability awards. Our projects incorporate sustainable housing technologies such as air-source heat pumps, infrared panels, photovoltaic solar panels, and battery storage. The design also includes pollution-absorbing plaster, refrigerators that keep food fresh for longer, heated skirting boards, and showers powered by air.
We have installed SEDBUK A-rated condensing boilers, the most efficient heating systems available, and energy-efficient bulbs that can reduce electricity consumption by 75-80% wherever possible. Our projects also support sustainability through green spaces that promote natural habitats, convertible roofs, and solar panels. As a result, 22% of Barratt London homes use renewable energy sources such as solar panels.
In addition to creating developments integrated with public transportation systems to encourage alternative modes of transportation, Barratt London provides car clubs and bicycle storage facilities while constructing miles of bicycle lanes.
Q5 What trends do you foresee in the sector in 2024?
We’ve been on a rollercoaster for the last few years, and there has been a lot of uncertainty in the market – a lot of instability and policy change as well – we’ve had Brexit, changing to stamp duty, several changes to leadership in the government, and COVID as well. All of these affect our business and influence consumer behaviour. So, for example, the most significant change from COVID-19 was people wanted to move out of London from Zones 1 and 2 and look for a change of lifestyle – better quality of life, more green spaces and more freedom. A lifestyle balance and a place they could call home, while still being able to commute into central London within 20 minutes.
That has played into our hands very well with our business strategy to expand into those areas. It has also affected the way we approach the product, we’re looking at things the customer is looking for – the quality of finishes, for example. We want to keep our product relevant and fashionable, modern and at the forefront of our customer's needs and wants.