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Vendor Finance

Property developer Alex Gardener talks with property lawyer Tariq Mubarak

In the discussion below I spoke with Alex Garner of Hawksburg Homes (hawksburg.co.uk) to discuss in detail about vendor finance, or a deferred consideration deal that Alex and his business partners completed on a few months ago. Alex started off by telling me a little bit about his background and how he got into property development.

AG: I spent the last 28 years in food manufacturing, designing food processes for the major food companies and the retailers. I also designed and project managed factory premises to fit around those processes. I spent probably the last 15 years on factory designs, which are all very unique and bespoke.

I realised the part of that job that I really enjoyed was the process of designing and building the factory premises, rather more than selling what was being made in those factories. Development was always something I’d wanted to get into so I thought this is now my opportunity, whilst I’m still relatively young enough. I thought if it doesn’t work out, I could go back to my previous career. Two years ago, whilst I was a shareholder holding managing director roles, I left those positions and started on a journey of education and mentorship, to get myself into a position where I am today, which is working on our first development.

TM: It sounds like you were quite accustomed to industrial or semi-industrial buildings. Were you doing ground up developments or converting existing buildings to meet requirements?

AG: It was actually both - we did some ground up and some converting. From a food factory perspective, you’re basically inserting a box within an existing building to house all those linear manufacturing processes. The most challenging part of the design is the people flow and the product flows because they can’t cross each other. You’ve got to minimize touch points and people movements, because you’re so concentrated on your margin, every time somebody touches a product, or has to move an extra 10 metres, it’s all time which then impacts on your margin. That design element is the critical thing you’ve got to get right, especially if you’ve got 20-30 people in a factory, or spending time moving around, it’s like dead time. Great design means people are in their positions all the time without having to move away.

TM: Thanks Alex, that’s a fascinating insight into the world of food manufacturing process design & build. Let’s speak about your first development deal. This is a site that you and I worked on and which you completed on recently. Talk us through firstly, how did you find the site and how you went about negotiating to acquire it. 

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