By Scott Wright

THE new chief executive of Mactaggart & Mickel Group has declared the historic Scottish company has the firepower to ramp up its land bank in England and strengthen its position in the private rented sector, following its exit from housebuilding in the summer.

Family-owned Mac Mic surprised observers when it sold its housebuilding and timber frame businesses to Elgin-based Springfield Properties in a deal worth nearly £50 million in June.

The company had established its reputation building homes in the decades following its formation in 1925, notably in the west of Scotland.

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The Springfield deal signalled a new direction for Mactaggart & Mickel, which when the disposals were announced made clear its new focus would be on land investment and PRS projects.

Mac Mic’s strategic land business includes more than 80 developments spanning more than 3,500 acres in England and 2,500 acres in Scotland. And it has a portfolio of around 400 private rented properties, valued at £71 million, in locations such as London and Edinburgh.

Paul McAninch, a Mac Mic veteran of 20 years who recently succeeded Ed Monaghan as chief executive, said the company stands ready to invest significantly in both areas of the business. The Springfield deal will bring in £46m over the next five years, while the company has a bank facility of £30m.

Mr McAninch, formerly group finance director of the company, said “there is a real focus” to expand the land bank in England.

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He told The Herald: “We are piecing together the puzzle, as it were, and just expanding that footprint. We see huge opportunity across that footprint.”

Mr McAninch noted that the company had started investing in land in England in 2010, with an initial focus in areas such as Worcestershire and Taunton. In the years that followed, it spread east into locations including Oxfordshire and Swindon, and then more recently into the south-east, opening of an office in Paddington which allows it to serve Surrey, Suffolk, and Kent. Now it is recruiting a strategic land manager to lead operations more centrally as it targets Milton Keynes, Bedfordshire, Cambridgeshire, and Hertfordshire.

Mr McAninch said the market for buying land is competitive, but he emphasised: “We have a good track record now. We have established that over the last 10,12 years. We have boots in the ground… and a motivated, hungry team with great networks.”

While the focus of the company’s land investment activity is on supplying the residential sector, Mr McAninch noted that it was investing in land to be developed for other uses. It is currently applying for planning consent for a solar park on land it owns in Inchinnan, Renfrewshire.

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He said: “That dynamic has been emerging for some time for us. There is huge demand around land for the renewables sector. Also, logistics and data centres as well. We are open to all of those markets. We do see it coming and it is something we are driving on with.”

Equally, the company sees an opportunity to grow its presence in the private rented property sector, in which it has been active since the 1930s. Mr McAninch said it is a growing part of the housing market amid increasing demand for rental properties in Scotland.

Commenting on why company had chosen to exit housebuilding, Mr McAninch explained that the market had become increasingly competitive for a firm of its size, notably since the financial crisis of 2008 and 2009. It was coming up against major public companies and regional players with “deep pockets”.

“The challenge was becoming more acute,” Mr McAninch said. “Without that sort of scale to compete with the larger regionals and plcs, it was just very difficult.”

Meanwhile, asked to comment on the fall-out from the UK Government’s mini-Budget, which in recent days sparked a collapse in the pound to a record low against the dollar, fears of higher inflation and forecasts that interest rates will rise to six per cent next year, Mr McAnich stated: “All businesses and their customers are affected by what’s happening right now, and I share the hope that many have that financial markets will settle down.

“We remain focused on how we can address the fundamental challenges facing the property sector, and the areas in which we work. In the immediate term we continue to be mindful of these economic headwinds relative to our investment plans.

“The government’s growth plan recognises that more homes and infrastructure is needed, more quickly, across England which will remain a key region for the group as well as our growth ambitions in Scotland. We welcome this. And thanks to colleagues’ work, we are in a strong position as a group to play a role in addressing this challenge. We stand ready to work with partners to deliver what’s needed.”

Prior to becoming finance director and then chief executive of Mactaggart & Mickel, Mr McAninch was managing director of the firm’s investment fund and chairman of its investment division. He retains his roles as a board member of Shawfair LLP, a project to build 4,000 homes that Mac Mic is delivering with partners in Edinburgh, a non-executive director of property technology business iOPT, and as an advisory committee member of the YFM Equity Partners Buy Out Fund I.

Mactaggart & Mickel director Andrew Mickel said: “Working with directors, Paul has played an integral role in setting the group on a path to future growth and success. We are delighted to confirm his appointment and are encouraged by the strong platform the group has, to invest and continue to grow. We look forward to supporting him and the team as they deliver the group’s growth ambitions.”

Mr McAninch said: “I am extremely excited about the opportunity. There is a huge opportunity out there across the UK. The group are well capitalised. We have great liquidity [and] we have a bit of firepower now.”