This did, of course, involve an important choice of where to focus. In our case the choice was reasonably straightforward. The majority of our stock is in the Home Counties of Buckinghamshire, Bedfordshire and Hertfordshire, but we also had some stock in London.
There are many great things about London, but it is also a different and in many ways more challenging environment than our Home Counties heartland, not least from a development perspective. For Paradigm it made sense to focus on the areas we knew best.
Fortunately for us we found a partner in Guinness that had gone through a similar process, and we concluded that it wanted to consolidate its presence in London but was less focused on some of our core Home Counties territory. As a result, a win-win deal was possible.
The ensuing negotiations, due diligence and implementation process involved a significant investment in time and capacity.
“Our London stock is now largely limited to suburban areas around the M25, plus a homelessness prevention scheme we are rather proud of in Walthamstow”
The result was a deal that involved more than 1,100 homes moving to Guinness and more than 1,300 homes coming to Paradigm. It means that we have substantially strengthened our presence in parts of Buckinghamshire, Bedfordshire and Hertfordshire and brought into our full ownership an estate in Milton Keynes where both organisations had homes.
Our London stock is now largely limited to suburban areas around the M25, plus a homelessness prevention scheme we are rather proud of in Walthamstow.
It wasn’t always straightforward, but we are very pleased we persevered. If a suitable opportunity became available we would do it again, especially now we have the added advantage of considerable experience in this space.
Clearly a focus on a tighter geography won’t be the right answer for everyone. For example, for specialist providers the drivers may be very different.
But I think it is also fair to say that the sector’s evolution has not delivered the optimal pattern of stock holdings. I hope and expect that stock swaps, sales/acquisitions and perhaps some management partnerships will be an increasing part of our collective future.
Matthew Bailes, chief executive, Paradigm