Quintain boss shrugging off debt with plans for Greenwich and Wembley

 
Kasmira Jefford
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Maxwell James tells Kasmira Jefford how he is banking on filling the London housing shortage as he turns the firm around

MAXWELL JAMES wasted no time in making changes to Quintain since becoming chief executive in May last year.

When the architect-turned-banker took the reins from the developer’s founder Adrian Wyatt, the heavily debt-laden company was facing questions over the strategy for its huge 190-acre scheme in Greenwich near to the 02 while Wembley – its second project in London – had been all but written-off by the market.

After years of trying to prove to long-suffering investors that it could deliver on both schemes, James – within his first month in the job – brought in one of Hong Kong’s richest men as a partner on Greenwich, in a crucial deal that has Quintain firing on all four cylinders again.

“When I came on board, the view that I and the other management team took was that actually what we needed to do was delever and deliver,” he says, as we discuss his first year in office. As someone who spent over 20 years in the banking industry before joining Quintain as an executive in 2011 – James was an apt fit to take over a firm suffering from taking on too much debt before the housing crisis.

A former colleague of Quintain’s chairman and Lazard’s UK boss William Rucker, James already knew the company well as a client and didn’t hesitate when he was approached to switch to management – a move he doesn’t regret.

“As a banker you shift in and out and onto the next deal but within a company you live with your decisions you make and that I am actually quite enjoying,” he said.

So far, his strategy is succeeding. Last month the FTSE 250 group’s reported pre-tax profits were up from £5.8m to £8.2m in the year to 31 March while its debt pile has been whittled down by £91m to £444m. The company’s share price has almost doubled since its deal with Cheng Kar-Shun’s investment vehicle Knight Dragon last June, to close at 78.5p on Friday.

Knight Dragon agreed to buy Australian developer Lend Lease out of its 50 per cent stake in the Greenwich project and take over 10 per cent of Quintain’s half share in exchange for £450m of funding including debt.

The move meant giving up control of the venture but means Quintain will not have to put in any new capital and will continue to manage the scheme, generating about £4m a year in fees.

The firm plans to start building the first 500 homes this summer on the site’s southern quarter, which will eventually deliver 10,000 homes in 20 years. But it is on the northern part of the development, Peninsula Quays, across the river from Canary Wharf, where Quintain hopes to attract upmarket buyers.

“We want to create the residential foil for Canary Wharf,” says James.

“You have got 120,000 people in Canary Wharf who – it has been tough market for the last six years – but who are still paid very well. They have one of the highest incomes per capita in Europe and there is a natural relationship with creating residential which we think will attract them.”

Meanwhile, big changes have also taken place at Wembley, where Quintain is developing 85 acres of land around the stadium. A Hilton hotel has opened, and the London Designer Outlet will launch in October.

A year on, pressure still remains on James to bring the company’s debt down to £400m by next year, by selling secondary assets outside London.

But James says Quintain is well-placed to maximise value.

“London is growing significantly and as it draws in people both from the rest of the UK and also internationally there is an imbalance that it occurring – a 20,000 home shortage each year which means a 100,000 shortage blocking up over the next five years.

“There are a bunch of developers including ourselves who are saying, ‘How can we take advantage by responding to that demand?’

With his Hong Kong ally on board and one of the biggest consented landbanks, James is already halfway to answering his own question.

CV: MAXWELL JAMES
Age: 46

Work:
1988 Started his career in architecture before moving into real estate finance

1997 Director, real estate, Lazard.

2003 Global head of real estate at HSBC Investment Bank

2006 Founder and chief executive of investment bank Lowndes Partners

2011 Executive director, Quintain

2012 Chief executive, Quintain

Education: Graduated in Architecture from University College, London and has an MBA from Imperial College

Home: Lives in south-west London with his partner. Has a son and two girls.

Hobbies: Tennis, rugby, movies