HJ Collection: Excelling in the face of downturn

Property development is an overcrowded market, so why did you decide to launch HJ Collection? I launched HJ Collection in early 2019 having spent many years running my first business, Hunter Jones, which specialises in introducing High Net Worth individuals and sophisticated investors to alternative property investment opportunities. Having established a powerful network within the sector together with a sound understanding of what a good property investment and development opportunity looks like, I knew there was a gap in the market for a revolutionary developer that diversifies risk for investors. Give us an overview of what’s happening at the company. 2022 has been an excellent year for HJ Collection. Over the last 12 months, we have acquired eight new sites in strategic locations across the UK, including Stafford, Ipswich, and Lowestoft, taking our portfolio to a total of 15 buildings, comprising of 650 individual residential units and a GDV of over £70m. As a result, we were delighted to be recognised as ‘Property Developer of the Year’ at the prestigious National LIS Awards and now have ambitious plans in place to accelerate our growth by 40% during 2023 and beyond. Many SME property developers and small construction companies have disappeared over the past two decades. Why is this and how much of it would you attribute to a lack of funding? The last few years have been incredibly tough for many SMEs as a result of the COVID-19 pandemic and its aftermath, together with the current cost of living crisis and resulting economic downturn. Therefore, it’s no surprise that smaller property developers and construction companies are struggling to remain afloat, particularly if they have finance and cashflow issues, as many often do. Funding plays a pivotal role in property development, particularly during construction and until the point of sale, rental, or re-financing. Without it, the vast majority of property development firms would cease to exist. Is the government doing enough to support property developers? The UK Government is continuing to push its ‘levelling up’ agenda, which provides developers with access to a £1.5bn Home Building Fund, comprising of loan finance between £250,000 to £250m for property and infrastructure development. Although this sounds extremely positive and has certainly benefited developers across the country, many are still facing challenges in sourcing and funding materials as a result of global supply chain issues, fuelled by Brexit and the Russian invasion of Ukraine. If the Government could do more to support developers with these challenges, I believe the ‘levelling up’ agenda would come to fruition at a faster pace, helping to overcome issues with employment, housing, and local infrastructure. What challenges and opportunities do you see ahead for property developers in 2023 With the UK forecast to be in recession throughout 2023, the next 12 months are likely to present many challenges for the property development sector. However, with downturn comes opportunity, meaning the following could be key to success: Property prices will fall: Property prices have already dropped and are forecast to fall even further in 2023. However, with less properties likely to be on the market, demand will remain strong meaning it is unlikely that property prices will see a significant dip. Yet, with all reductions comes an opportunity for investors to secure assets at a lower cost– particularly if purchasing commercial units for a residential conversion, that have stood empty for many months. Regeneration plans will drive investment: The growth in vacant commercial properties with extensive regeneration plans in multiple regions across the UK, will provide an ideal opportunity for property investment and development during 2023. Not only will this enable developers, like HJ Collection, to leverage permitted development rights to transform commercial to residential developments, but it will also enable investors to benefit from newly built BTR or BTL sites, sure to be in high demand in newly renovated city and town centre locations. As more regeneration plans come to fruition in 2023, this is certainly something to look out for. The property industry will hold its nerve: Despite forthcoming economic challenges, professionals throughout the property industry are of a similar opinion – yes, the next 12 months may be difficult, but the property industry will bounce back and is unlikely to dip to the levels seen in the 2008/09 recession. This means that for investors, bricks and mortar still provide the most risk-adverse investment opportunity, particularly when you consider growing rental demands and the ongoing housing crisis. Reece Mennie is the founder and CEO of property development firm, HJ Collection, and forward-thinking property investment consultancy, Hunter Jones Group.

HJ Collection: Excelling in the face of downturn

Reece Mennie, founder and CEO of the HJ Collection, explains how the firm has excelled over the past year in the face of a challenging economic market and what he predicts ahead for the remainder of 2023

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