In Conversation With: Dan Needham of Muse Developments

DAN Needham, Yorkshire regional director at Muse Developments, tells Ian Briggs why the group is positive about its future and is seeing opportunities in the region.

FOR many in the construction and property development industry, times have been tough with little light at the end of the recessionary tunnel.

But Muse Developments is managing to buck the trend.

The Salford-headquartered developer recently announced it had seen a “modest improvement in market conditions”.

Muse, which is part of quoted construction giant Morgan Sindall, increased turnover to £48m during the year (2009: £32m) which was based on stronger sales of residential units at some of its schemes as well as increases in development fees from projects that it manages.

It also completed a number of forward-sold schemes and generated some income through land trading.

Muse currently has a development pipeline of around 30 projects, of which its share has a value of £1.4bn. Many of these include joint ventures with other investors and with public sector landowners.

In Yorkshire, these include Muse being Doncaster Council’s development partner on the town’s £300m Civic and Cultural Quarter.

Muse is involved in the £140m Merchant Gate development in Wakefield and has interests in a 100 acre development site in the Aire Valley area of Leeds – a shortlisted location for the Leeds City Region’s Enterprise Zone.

Muse’s Yorkshire office, based in Leeds wirh seven full-time staff, is also working in partnership with the Homes and Communities Agency and Stockton Borough Council to create the £300m Northshore scheme in Stockton on Tees.

Parts of the scheme , including the construction of 50 homes at Northshore in partnership with sister company Lovell, have started.

“It’s a scheme that’s been a long time in the making,” says Mr Needham (right). “In this market to get the scheme kick-started will certainly provide the catalyst. It’s been a region widely hit by problems at Corus and the decline in manufacturing.”

Mr Needham admits that Muse has been somewhat fortunate in that despite the majority of the schemes it is working on out of its Leeds office being run in partnership with the public sector, they have been far enough forward not to have been badly affected by austerity mesures.

But he says its strong position – having no borrowings – also puts it ahead of competitors.

And he says: “We’ve invested significant elements of our own cash in moving these schemes forward. It’s about us taking a more flexible approach and increasing our commitment to allow schemes to happen.”

Mr Needham points to an example at the Doncaster CCQ, which will see the centre of the town centre transformed, where Muse is investing a significant sum on improving car parking facilities.

“We’re not going to put money in for nothing but it’s about being flexible. We’re putting money into the pot to help deliver the first phase.

“We’ve got a combination of a development management record and strong balance sheet.” 

Mr Needham, who hails from Halifax and helped set up Muse’s Yorkshire office a decade ago, said the proposed Logic Leeds scheme in the heart of the Aire Valley, adjacent to the new East Leeds Link Road and close to junction 45 of the M1, was on ice as Muse looked for “funding mechanisms” to start work on site.

However, he said the possibility of an enterprise zome being sited in the area would also have a say on its future.

Looking forward, Mr Needham, who has worked for the company in the North West but returned to head its Leeds office in 2007, said Muse was seeking out other opportunities in Yorkshire and despite a slowdown in activity because of low interest rates, and the continuing spectre of access to bank finance being difficult and empty rates legislation hitting speculative development, the group is in discussions with a number of potential partners.

“So to see some sustained market recovery you need to achieve occupier confidence,” he says. “

But we are seeing some opportunities. For example in manufacturing and distribution and we are looking at the East Midlands, South Yorkshire and the North East for employment distribution opportunities.”