CoStar Q&A: Salmon’s New Management Team Reviews a Year of Change

By Paul Norman
CoStar News
10 November 2020 | 14:51

Salmon Developments Limited entered a new era close to a year ago with a £40m
Management Buyout transaction which saw founding Directors Doug Stewart and
Rorie Henderson hand over the reins of the company to fellow Salmon Director Paul
Stoodley, together with Chief Financial Officer Anthony Harper.

CoStar News catches up with Stoodley to see how the first year for the new look Salmon has been, and how
a unique market has changed his thinking.
The change in leadership and ownership of Salmon in December of last year was part
of a long-term succession plan with the company continuing to operate and trade
under the Salmon Property banner and Doug Stewart becoming Chairman.
The company was originally co-founded in 1989 and then in 1994 Salmon formed a
joint venture company, Salmon Harvester Properties Ltd with NFU Mutual. That joint
venture has completed in excess of 100 developments in all use classes across the
country worth in excess of £1bn.

Salmon Property itself has for several years been an asset manager for £200m of
investment product and in both 2016 and 2017 was awarded the MSCI UK property
investment award for highest performing UK balanced fund.

CoStar: The MBO of Salmon completed a year ago with ambitious plans for growth.
Could you talk us through these?

Stoodley: We have always tried to anticipate where the property market is taking us.
Industrials played a major part in the start 30 years ago and we subsequently
delivered food retail, out of town retail, hotels and regional ofces.
In a sense it has come full circle. Although the building might present as industrial
they are now more likely to be lled with goods to be distributed and technology. The
plan is to try to stay ahead of the curve and develop into growth sectors.

CoStar: It’s been an interesting year to say the least. How has Salmon responded both
practically and strategically to the pandemic and to the other challenges of the last
12 months?

I think one of the strengths of the company is it is nimble. We have been able to make
changes where they have been needed quickly. At one end of the spectrum, we took
the government guidance on returning to the office seriously but we were back in as
soon as was practicably possible. That said the working day is now tailored to an
individual’s circumstances. We were already set up for fully remote working but like
everyone we had to adapt in certain areas.

In terms of our real-estate focus we have concentrated on existing projects in the
B2/B8 and urban Logistics/workspace sector together with senior living where we
have just gone on site as development manager for Royal London in High Wycombe
on 156 units to be operated by Audley. These uses will be the ones we continue to
focus on for the foreseeable future.

We also hired at the beginning of the summer to undertake a research piece on a
particularly nuanced element of one of our focus areas and it has proven there is still
a place for ‘boots on the ground’ which feels like a better investment than bidding in
the open market at the moment.

CoStar: How has the Salmon team responded to the pandemic?

Everyone has been different and because we are a small team we have been able to
provide a personal response. Everyone has delivered what we have asked of them and
more. We have maintained our regular suite of meetings including weekly reviews
and 1-2-1 conversations so there are plenty of opportunities for people to check-in.

CoStar: Could you outline some of the key wins during the period?

First and foremost has been managing the post-MBO actions. We also achieved
planning for a mixed-use commercial building in Clapham and we are going on site in
High Wycombe where we are working for Royal London and managing through its
senior living scheme for Audley.

CoStar: Has the business changed its position or strategy at all during the period, in
particular because of the pandemic?

Not really. The business was already focussing on the sectors that are growing and we
hadn’t – either by luck or judgement – been in the sectors hit hardest. Where we have
had to review our strategy is to be more competitive in these markets as other
operators have moved in – we need to try to keep acceptable margins as risk in the
development process is easy to overlook.

CoStar: Has real estate more fundamentally been changed by the pandemic or has it merely
sped up already in train trends?

A bit of both. The digital economy was already outpacing traditional methods in
many if not most areas. The pandemic forced people to adapt and online was the
natural solution so the real-estate knock-ons in this area will be profound. The way
we work in offices has changed but it is difficult to say now that we won’t be back in
the workplace. But when we are it will be subtly different and perform different

I think WFH will be a factor but we are not planning to do it anytime soon. We may
just be an outlier but human contact is essential and offices support more than just
their employees. No-one would have said the devastating impact on the hospitality
trade was a trend that has been hastened so it is important to consider individual
sectors. It is still very early days and 2021 will start to evidence some of the longer-term shifts.

CoStar: What has the key lessons learned been in this first year since the MBO?

I think control the controllables and do not get distracted. Look at the markets you
operate in and challenge why and how you operate there. And finally, adapt and
embrace new ways of working.