School of Hard Knocks: Scarborough Group’s Kevin McCabe

The keystone to success is the ability to adapt to change. Don't moan and groan, don't waste your days as I was thinking you can't do anything you can. Hello and welcome to the School of Heart Knocks. A new six-part series brought to you by E.T. Procty Podcasts. I'm Sam McClarry and I'll be your host for this series which will bring you six in-depth interviews with key individuals from across the U.K. commercial real estate industry. Over the course of this series we'll meet people who have lived through some of the highs and lows of this wonderful business of real estate. And through our conversations we dig deep into the skills, the mindset and the structures you need in place to successfully navigate truly tight. Originally designed as part of E.G.'s next generation project to provide a tool for people in real estate. And they've only worked during a period of low interest rates and high activity. What follows is a series of conversations I guarantee everyone worth like helpful, inspiring and dare I say it, even entertaining. Joining me as our first scholar in the School of Heart Knocks is Kevin McCabe. The chef will be born businessman who set up Scarborough Group growing the company from zero to a two billion pound business. With decades of experience on his belt, Kevin tells us how his journey began with knowing what he didn't want to do. And how he grew a successful business by making sure he sees the opportunities that came his way, built trust with partners, made sure he knew all the ends and outs of the business, and was wise enough to know exactly when things started to feel too good to be true. I absolutely love this first conversation and I know you all too. It teaches us about the importance of loyalty, trust and respect. About knowing what you want and going for it, controlling the controllables and adapting. And of incompetent that if you do all that, you will not fail. Things will change, but things will also go better. So sit back, get your pen and paper ready, because it's time to enroll yourself in the School of Heart Knocks. Listen hard and enjoy it, because graduation promises the better ground things to navigate any of the knocks the economy may throw your way. And listen to the end to see who's up next in the Hard Knocks timetable, and what they think property is a little bit like Caroline. Enjoy. So Kevin McKay, welcome to the EG property podcast and our little studio. It's not that little actually, it's quite big. It's cozy, another sea. We are just for listeners, there was a ban on a certain seaward, but not the cozy word. So we're here today talking about you, about your life, and I'm going to pick your extensive brains for some lessons, I hope, for some of our listeners. I was going to say some of our younger listeners, but maybe some of the more experienced need those lessons as well. But before we get into that, I want to go back to the beginning and wonder if you can tell us your story from that first day that you became a surveyor to now. Where did it all start and talk us through the journey? It started with me at the age of 16 making a decision. The decision being a sort of a South Yorkshire lad from Sheffield, sort of a working class background where you went into probably the steel industry because that swap Sheffield was about in the 1960s. So I had half a day in Samuel Osborne steelworks. Half a day was the day I made a decision for the first time in my life as a 16 year old, aimed for me. However, in that era, this will be, this will be, gosh, 1964, you couldn't not have a job. I couldn't go back home and tell Maureen Paard quit this job. So I walked from the home in Sheffield to a building site, about two miles away from home, which was a company called Accroyd Nabbert, with a contractor. Building the new holes of, the new Masonic holes for Sheffield. So it was about, say, two mile walk and immediately got a job there where always the guy in charge was called a general foreman. And it was a bit like a matron in the hospital. They ruled the roost and anything and everything that happened on their site. So they set me on, I think it's about £3.50 a week, something. And it was one to sort of, apart from making tea, doing a bit of moving planks, helping scaffolders and the like. The general foreman, God bless him, a guy called Ted Schofield, had an immediate impact after about sort of the week of working on this building site. And enjoying it may say, it was one of, saying, lad, they needed to get this same qualified, what they're doing doing this. So Ted Schofield, God bless him, sort of put me on this one of thinking, well, I've got to get qualified, he's told me. He's much more of a boss to be than my dad. So I went to the Polytechnic, to go one night a week, to night school, and took a correspondence course, which was purgatory. Because I wasn't a great academic at school, you know, my sport, sport, sorry, showed me, took me through the school days and beyond. But I did this correspondence course, when I was courting my wife, because there were no cars in the family, so courting was really meeting her in town on to off bus. And no other women before your wife, obviously. So it was a few cheeky buggers. It was one of literally doing some reading correspondence course, and believe it or not, and I say I'm not an academic, never was never happy. But I learnt quickly, and so bizarrely, I qualified quite nearly, I think my last exam was when I was 20, and became a sort of an associate member of the Institute of Conti Surveys, which in due course was merged with the RICS. So I'd actually done something. The in-between bit was when moving after two years working out on site, to the officers of Accroyd and Abbott, and that's what got me on the real road of a career that went from construction to property, always still with construction at heart. So you qualified at 20, then you don't stay in Sheffield, you move up to Scotland. Accroyd and Abbott, a very progressive guy, sorry company, the son of the founder was a guy called Barry Abbott, and he was my real mentor, didn't see him much, but I admired him, he was the go-getter, he was changing Accroyd and Abbott from being an old fashioned builder into a contractor and developer. So Accroyd and Abbott would then take over by Bovis, gosh, I'm struggling for the year. When Bovis took over, Barry Abbott moved down to London to be on the main board. So I lost contact directly with Barry Abbott, but the fact he was still there in London, I was in Sheffield, I enjoyed working for Accroyd and Abbott that became Bovis. And within a few months of that, I was asked to move to Scotland for Bovis. They were opening a property office, not a construction office, probably office, and they thought I'd be ideal to work with them at the property office, particularly because they got to join venture in Aberdeen with a company called Teasland Development Company Limited to develop the first speculative office block that Aberdeen ever seen. So I actually then got back involved in project management, but at the same time was learning all about the commercial side of real estate. So having to meet with agents, either it's for raising money, whether it's for tenants, seeing what they did for a living, like learning about leases, which was different from sort of digging holes and building up buildings. So I decided, yeah, when straight up, till my wife would be married sort of months, not years, hey, we're up further north last to Scotland, she got nothing to say in other than, oh, okay. However, then, my mentor Barry Abbott, all of a sudden, disappeared from Bovis, must have had an argument, not unusual, so he quit. That made this young book, who sort of he was my mentor, a bit brassed off with Bovis. Goodness knows why again, but things have an effect on one's life when you're younger. The Teasland side of the joint venture said, Kevin, why don't you come and join us, to which I thought, fine. Teasland's chairman of bleak chief exact was the guy called Martin Cohen, a lawyer by way background. Martin was a good sportsman, particularly at a game called Squash, okay. So that was an appeal, because I was also in those days a pretty good Squash player. So I joined Teasland, that meant, I'm telling my wife, we're going to live at Stockton less. She didn't even know where Stockton was. It was a quick move to live in Edinburgh, to come down to Teaside, still to look after the project, I may say, in Aberdeen, amongst other matters. And that took us to live in Stockton. We lived above Squire Bankcroft, which was a furniture store, a fish and chipy below, and a news agent below. Perfect. It sounds perfect, fish and chips every night, didn't stop until 11 o'clock, and news agents opened at 4.30. One bed flat, my wife must have loved me to put up with me. Same, my wife had to go and get a job there, we weren't wealthy. It took us about two years to sell the house in Sheffield, because we're in a time of recession. You know, these things in life that happen now and again. And when we did sell it, we then had a proper home in Teaside, and I worked merrily with Teasland until the mid-70s. And then you set up on your own, your first company, with a £10,000 loan, which sounds like, well, it's probably quite a lot back then, but now, from £10,000 to £2,000,000,000,000 now is Scabra? £2,000,000,000. And £2,000,000 of assets. Oh, I've got, look at the minute, can you value assets? If I can tell you how much acreage we've got, and the list of the projects, you can sort of stick figures on it, but, you know, can you actually realise the high value? We're in a rock and roll period, you know, it's sort of turning forward to today, as we reflect back on the era I came into real estate in, and we're in a rock and roll period where so many things have gone wrong for the nation. That's had a material effect on the real estate industry, and therefore with it, if there's a recession for a long time, the construction industry. Which, because of what's happened in the past, you can live with it, you can adapt to a different circumstance that we're in today, for our group, as a property company. We're looking not to have a huge amount of debt, we're looking to have projects in great cities, leads, Manchester, in particular, Sheffield, up north across the border, just seven miles beyond Edinburgh. And we can sort of keep what we've got as projects, keep improving them in value, which includes development, and sit and wait. All the time, adapting the group, because we've got to find other ways of making money whilst values sort of remain low-ish, or demand remains low-ish. So we're doing that, we're adapting. As I talk to you now, the next meeting will be with colleagues, reminding them what we've agreed and the time table to achieve. Let's stay with that then, and how you get to a place where you can sit here, quite calmly, I suppose, and say, well, you know, two billion what? Actually, it's about what we have and what we're able to do. And I imagine starting out, it probably wasn't quite so, not that it's without stress today, but wasn't quite so light on stress when you were starting. You mean when you borrow ten grand? When you borrow ten grand, and it feels like quite a lot of money. Yeah, look, with spending time in Scotland, Scotland became the roots of Scarborough Group, what became Scarborough Group? Seems odd now, because obviously I'm a Yorkshire lad, and I headquartered in Yorkshire. But that's time I spent in Scotland, initially with Bovis, and then with Teasland, really is where I learned all about property, I learned how to sort of work with an organisation that was well managed, Teasland, and with an un-stute chairman, and that had to also cope with things called recession. And before I left Teasland, which was the mid-70s, '76, we just sort of were coming out then of a major recession, but I got my ten grand, and York had actually had some money to pay myself, and it was a man in a docks set up with a small office in Scarborough with a PA. It was a time where nothing like mobile phones, you had one call from a little chef or whatever, back to Tothis, see what message had been left. Work perfectly, because we're all the same. And it meant I was travelling freely, meeting agents, and from the word go, doing deals. Yes, 10,000 back in the early 70s is probably worth 100,000, so I could actually, I did two or three small schemes in Edinburgh, renovating properties in good locations, Albany Street, York Place, and whatever, which sold on two or three to the St Quintins and the Stanley with the agents, I can't remember the name of their client, but sold those on. It made probably about £40,000 per deal, which again, setting up on your own, was, wow, wasn't time to sort of celebrate with a bottle of shampoo, it was having a cup of tea like serving today. And it built the association, the man at Bank of Scotland where I got the money from, was a guy called Bill Sison, wonderful guy, a baller hat manager, you know, that occurred in those days. And Bill was one of the senior managers, based at one of this big branches on George Street, Edinburgh, which was in spitting distance at the headquarters of the mound in Edinburgh. And from Bill Sison, who sort of, say it the pleasant way, took a liking to this young book who just formed his own company, he got me to meet the people who were coming in the bank, not right at the top. And one of the bank subsidiaries called British Linnon Bank, who was headquartered at the original headquarter of British Linnon Bank, which went back to the 16th century, were on Thread Needle Street, a property we ended up buying about, who 20 years later. So, via Bill, he introduced me to people in the bank who were involved in real estate, out British Linnon Bank, they ended up being a major funder for me, they ended up at one time in one of the companies taking a stake, an equity investment. So, I began to learn so much more about not just the property, but the corporate side of property, dealing with financiers who wanted to sort of be charging me an interest rate, based upon base rate or liable, wonderful liable, and margin. So, I was cutting my teeth quickly, I was so anxious to get money, and I'd got such faith in British Linnon Bank, and it worked, we were a good team. Do you put those connections down to luck, or do you think you put yourself in the right place at the right time? I can probably answer you now, nearly 50 years later. I don't think it was luck, I think I got that energy, desire, and as you get older, I'm not talking about my age now, but probably in your 40s, you've learnt an awful lot, you've polished yourself for a wee bit, you can adapt to the organisation you're dealing with in a way where you will probably get your way. So, I'd matured, and I'd probably matured, maybe I'd matured earlier than a lot of other similar age guys, because I started earlier, and I started in, you know, right at the bottom, so to speak. So, I'd learnt a lot, I'd got more confident, I was unusual for a manager, because I understood construction better than most, but that gave me a sense of pleasure, and also being ahead of the pack, and I employed some good people. So, now you're getting investment in your businesses, you're building a portfolio, when does Scarborough come along, and the next phase of the development of the business? At that time, we were active, primarily in Scotland, the only of the schemes in the 70s elsewhere was one in Whitby, which had nearly forgotten about it, Flourgate, which effectively was building a supermarket for a company called Hintons, that ultimately became owned by Tesco. And we had a scheme, a small industrial scheme, a place called Pity Me, which is close to Durham. What was Pity Me like? Did you pity anyone there? No, it's very nice, quite nice, she has near Durham, so it was easy to get to, so it was a scheme that went well, it was sort of building simple old warehouses for people who stored caravans, and smaller sorts of business. So, but it really Scotland, and the contacts I'd made in Aberdeen, for example, which was becoming the real oil city, and one of first went to Aberdeen on the joint venture between Teasland and Bovis. Believe me, the estate agent there was a company called either Beness or Benets, and in their office it's the old sloping desks, they really were old fashioned, everything changed dramatically within two or three years to become a switched on the city. The pace of growth in Aberdeen was great, so did quite a few small schemes there in some of the wonderful buildings, obviously listed buildings, but just off Union Street, and it was simple renovations to lease and then sell, and then did shopping centre at Bridge of Don, which is one of the suburbs on the outskirts of Aberdeen. And from Aberdeen, then made contact with the Highlands, the Inveness region, which oddly enough, I don't think my colleague Nick realised just how busy we used to be in the Highlands, on the strength initially of a company called William Lowe, who were again a supermarket operator, ultimately they became owned by Tesco down the track. - And of course shares in Tesco, should have had. - I should have done, you're right. What does Tesco stand for? - I don't know. - Tesco in, the owner of Tesco is, I can't remember his Christian name, but his wife is Tesco. - Oh, there you go. Fun fact. - That's ten quid you owe me, Gal. - Okay. - So if I win a pub quiz with that question, I'll give you 20. - So we end up building, again, supermarkets, a team that we're the company called Tullock, Tullock Construction, who were really a builder and funeral directors. You know, they made coffins, who were based in Nairn, and I built up a great association with their FD, guy called David Sutherland, who I spoke to on you last week, because he's a similar age to myself. And actually, from this builder-come funeral director, came a real partnership. I built in Nairn, again for William Lowe, and built in a place called Ding Wolf William Lowe, and on Tom Noorwick Street in Inverness itself, a major store for William Lowe, which became Tesco. Then we had all sorts together, Tullock's, I was teaching David about real estate, about property, so we did joint ventures for 15 years or more. We then set up Tullock home Scotland, which was a housing side, as a joint venture, to take Tullock's down to Central Belk, Scotland, because it was a busier, telling Central Belk. Why was it getting so busy? Because it would become known there in property. You could actually say what I'm saying to you good self, and what we were building or had built, and we grew like Topsy. And people, were you very close to communities and cities and the people, and was your reputation growing because you were delivering? Maybe delivery was easier back then, I don't know. It was easier. You could go and talk to the local authority, you could go and lodge planning applications for a few barb, not for tens of thousands of pounds, and you could gain consent easier. And I've got people, I've had an office either in Edinburgh or Glasgow, tracing that back to 1970s of bleak 1980s. So I've got people around me as well, and we just became so well-known that at one time I would say we weren't the biggest developer by any means in terms of size and scale what we're doing. But in terms of number of projects, or by golly I can take you around Scotland, not sure I want to show you them all now, because it's a lot of time ago, but we did it, a question, we did it. That in turn, I talk about the William Lowe ones, the only point of the bank, their bank of Scotland, was funding what was a pre-sold or a pre-leasky. That in turn brought me close to the bank, and it was really with the bank that I moved further south into the north of England, and then ultimately here in the south as well. Because of the bank's activities, and because in recessionary times they turned to me to say, "What can we do?" And I ended up being sort of an unpaid consultant, you know, the real true business friendship, that they brought me in. Sometimes it's because they got a client and a customer where they were fighting, and I was putting in between to sort of trying to sort out what's best for the bank, but also what's sensible for the customer. So I didn't get involved in sort of buying anything, it was one just to being a diplomat and talking for the benefit of the bank, but talking so the customer could accept and solving a problem. Other times it was one of seeing some of the bank's problems and working out how we can mitigate the problem of a loss or a deflation of, sorry, an increase in the debt. We came up in due course in recessionary periods with certain ways because of this guy, the bank trusted, that works so well for the bank. Let's stick with recessions for now, and I know technically we're not in one now, but it feels recessionary, doesn't it? And the market is definitely not buoyant, is it? Can you talk us through some of the lessons I suppose you've learnt from three recessions? Well, I just think four here. Four that you've worked through, and I guess you're just talking about working with the bank, how you get close to banks to do that, the kind of conversations you need to have. Some of the things maybe that you've got right by reading recessions, well, maybe some of the things that haven't gone quite so well. Yeah, I mean the first recession is really when I was going into loan, when printed because of the oil prices in Saudi, you know, they were going to sort of ration petrol. You couldn't drive it beyond 60 miles an hour, lights off at nine o'clock. Some of these things were sort of muted but never actually occurred. I was probably too young to be affected. I was probably too small to be overheard. I was using a 10 grand diplomatic way. On the recessions of the early 90s was a tricky one. Oh, I'm sorry, going back to the mid 70s, let's not forget. We then had interest rates or interest borrowing, probably a rate of over 10 percent. The margin on top, we stuck it to 14 and 15. Not for long when I looked back and that's where sometimes I think, yeah, it was as high as that, but it didn't last forever. It became sort of more acceptable. Because if I was doing appraisals back in the 70s and 80s, I'd normally use a 10 percent figure from my assessment of what the money would cost, cost me to build the development. So 10 percent was always sort of a norm in my mind. If you were lower than that, you were lucky. So one coat with recession like that. The 90s one was one again for myself through fortune, through working with the bank so much where some of these guys that British living bank had moved to Bank of Scotland. Ultimately, one of the guys became treasurer, Gavin Marson, wonderful guy. Gavin lives in dumb firm and still. And you build a very firm business friendship. Friendship, yes, but business friendship. That was what mattered to both the bank and myself. So in times recession, I actually was doing so well in helping the bank, buying from some of their problem clients of the property that prices to suit the bank, but also at the same time procuring from the bank a facility to do something else that we were working on. So it was sort of marrying a bad acquisition at a higher price than you want with a bigger lump of money to do a super scheme that made a lot for you and therefore compensated. And it was a tried and tested way we dealt with so, so many issues for probably 15 years. And were you able to think in that way, one because of that relationship, but two, did you have a sort of longer term view of returns or maybe returns in matter as much? No, look, things happen, don't they? And the acceleration in the size of our business and again, in perspective, you know, whilst we did a lot of small deals in the earlier, earlier days, we're doing bigger ones. And you know, if you go to Edinburgh, you'll go to Princes Exchange, which is one of the award-winning projects in Edinburgh, where Bank of Scotland had half of it and two big legal practice at the other half, we sold it to Crown Estates. We had a Prince Exchange down in Leeds, same award-winning lease to DLA or whatever they were called in those days and partly leased to Regis and sold on at some great yield. So we'd become a developer, certainly in Scotland and the North, that you could sort of match, not with British lands at this world and land securities, but we were a good developer. I'd got a good team's working with me in Scotland and in the North England, not so much in the South. And some of these schemes are referred to happened and were sort of devised in recessionary times. And some of that is about being sensible on timing and worrying about tomorrow, but not worrying about next year. You know, from tomorrow until next year, sort out what you want to build, go through the technicalities that are all pre-development activities, including the commercial side to get a feel. Then normally, I mean, what goes up does come down. And if I've been talking to my colleagues at the moment, because we are adapting to this dreadful, dreadful environment, it was one of sort of saying, you know, the key stone to success is the ability to adapt to change. And I never lost that. When you've got these problems, don't believe you shouldn't adapt. Just think what you need to adapt to. Now, at the moment, we, my group, are fortunate. We're not laden with that. We have some wonderful projects ongoing, but stoppable, because you know, anything that's had to be built has been built. And we don't just sit and wait. What do we do in the interim until the government sorts out the mess they've made for us all? And that really is offering our services to other people, like banks, financiers generally, equity investors, if you've got problems come to us. Don't go with the greatest respect to your agency fraternity, who may have a division, go to people who actually understand because they've own buildings, they've developed buildings from digging the holes in the ground, so to speak. We did that before, and I built the Teasland side of the Scarborough group, because again, we bought Teasland back in the early 90s, and modding coin it died a couple years earlier. Made it into a management services company, that again, because I'd learned a lot about business, business, that we listed on the stock exchange in 2002. When I listed it, it was valued at 20 million. I ended up having to buy it back to do a big deal I didn't sell in part the group to Australia in 2007, at 200 million. We got a reputation, we got a name, got bloody good people, we could get on with themselves, and this close affiliation with the bank, I'd be sort of talking to the bank or meeting key people at the bank every week. Not difficult, but either some of the key people at the bank came down to London, so it was easy for me then. How, listing and de-listing, selling and buying companies, knowing when to do that, 2007 was pretty good timing, wasn't it, to sell to Valade, how have you made those decisions? Look, I often get it wrong, so let me just stress that. The tale went really with Teasland, and I listed Teasland, I'm not listed Teasland for fun, it was to actually grow it into as big a company as I thought was sensible. That did mean at the time we'd got a lot of people working for a family-owned company, which does give you sleepless nights because you have a responsibility that you weren't really expecting, but you'd achieved it because you couldn't stop peddling quickly. When I've listed Teasland, where do I take it? Well, actually, I've got a top-class chief exec in Teasland, and lady I'm seeing this afternoon for a coffee, and an argument maybe. And it was well-shaped, we'd got offices in Edinburgh, in London, in the Midlands, in Leeds, et al. But what could I do with it? I'd listed it, I could raise money, I'd got people who did want to invest. Coincidentally, there was another company that was offering management services, not quite like our own, because our stretch to development, project management, straightforward property management, asset management, and fund management, I bought a small fund management company. Another similar company was called Property Fund Management, who were listed on the Stock Exchange as well. Catchy name, isn't it? Yeah, boring name, isn't it? And that was run by a guy called John Sims. He got blessed he died about seven or eight years ago now, but a new John, not that well, but quite well, enough to have a beer with him every few weeks. John only owned about 10% of the property firm management, they were listed, their magic touch, they got a platform of offices in Europe, just very briefly, and developed in Antwerp before an office scheme, and say went well, was divvy up to sell. We learned to be a bit about development in Europe, through Teasland, not through listening and looking at paperwork, rather than being on the ground, so I'd always got an inkling, and it was also to time where the Eurostar was being planned, so popping across so to speak. So probably for management were also listed. John was at an age, probably same age as me, but he didn't want to be the boss, he quite like the idea of the merger, and he knew some of the colleagues who worked for me as well. The logic was merger, he didn't carry the cloud from merger, two other well-known city entrepreneurs in property, good people may say, they held the key, I couldn't negotiate to deal with them, no arguments, but it was always saying, how desperate do I need it? I actually talked to my friends at the bank, said look, I want to get hold of this property fund management, it's got a platform of offices, ten offices, in virtually all the big nations of Europe, can you help me? So I got a facility off the bank, into the dawn raid, and bought 15% of, probably for management overnight, so all of a sudden they can't avoid having to deal with this cuckoo, got a big mistake. And that end up being a merger then, we bought out, probably for management, became Teaslin, that Teaslin IOG, we called it, that gave me this wonderful platform as well, offices, and that was occurred in 2004. Now what do you do when you've even got bigger, what do you do when you just take it over, how do you make it really tick? Because of this association with the bank, this trusted association that had worked so well and continued to do so, the bank thought it was great, what the K was doing, how can we work together? We worked together in the UK where you've ended up buying portfolio of properties, we've done it in a joint venture, what about doing something the same in Europe? So we formed Scarborough Continental Partners Limited, 50/50 the bank in ourselves, why? Well I've got all the people to go and look for the properties, whether they're in Sweden, where we've got a small office, in Denmark, where we've got a big office, in Paris, in Germany. Three office in Germany, in the Netherlands, in Amsterdam, it was ready made, I've got all the people to source it, I've got all the people to help put the funds out with the bank money, we needed funds. I was buying like Topsy, it worked so well, it worked too quickly, because the market was bloody stupid, and that's what I realised, you know, we couldn't stop buying, because people wanted to, but I knew we were buying on a market that was the curve going up, I knew it wouldn't last, because I had witnessed it before, as a young man, probably on two real occasions and one we blip. So by the time I'd been having it for two years, Scarborough Continental Partners, it had grown so big, we'd bought, we'd sold, we'd negotiated with people like Mercedes, but to buy some of their production areas, on sale and lease backs, from obviously, in their case, Germany. We bought the biggest office property in Copenhagen, which was called the Big House, very novel, and it was, I was forever travelling around, you know, Europe to do it, I went out and lived in Belgium for nine and eight years, you know, after the crash. But I knew at the time, this is crazy, it was then where the other side of dealing in property, so many people were following so many people, sort of semi-copying what I'd been up to, some of those people were international, coming from other countries, partly in the Far East, Singapore for example, and oddly enough, the Aussies now had been to Australia to watch cricket, because cricket's my favourite sport. So I want to say I know Australia well, I know the cricket grounds well, and a few boozes, but the Aussies were in town, and probably one of the first of them was a guy called John Roberts, who was the boss of multiplex, very nice bloke, multiplex really suffered immensely when they built Wembley Stadium here, and used to stay at the Dorchester. So I've shown there a few times through beer, and we talk, as you do when you're over a beer, you can talk anything, but you talk a wee bit about property, and what's life like in Australia, he virtually lived in the UK then. And from Togna multiplex, they were saying, well, wouldn't mind buying into what you've created in Europe. That made me think, well, if it's multiplex, so principally to me a builder rather than an investor in property, what about others? So it's like an unwitting beauty parade of three or four Australian companies, not all of whom are met. I mean, there was Macquarie Goodman in those days looking to buy. There was Scotland, which was run then by a guy from the UK, from I think it was from Nottingham members name there, and one or two others. So there was the Aussie charge, there was the sort of Far East charge, particularly two organisations from Singapore and one party from Malaysia. And so an unwitting beauty parade made me sort of not deal with any of these big names, but deal with a smaller company called Valad, who had bought a property in France or one off to try and get involved in the European business. Because they had heard of McCabe was talking to multiplex or whoever, they came to see me. That, I may say, coincided with a test match against Australia. So the money we've got clubbed, I may say, but the sort of atmosphere was right to talk to Turkey. Valad was a small effectively a read listed on the Aussie exchange that had very good support from Australian investors. Again, forgive me, I've forgotten the name of the investors, but the big institutions invested in them. And it was the time when the story was right. Why don't we, why don't we, being Valad, try and buy out to part of McCabe's empire, particularly the European one, and then negotiations, which I enjoyed. Then to achieve it on the Tisland PLC side, I had to de-list it and I had to therefore pay 200 million to de-list it, make it private to actually move into the deal and then agreed with Valad. That was probably took me from a six month deal, which with a size of transaction to me was a big one. And the time was perfect. Now, I'm not, don't consider me as a guru, may say. I knew the pride that it was too crazy a market. What did you use, though, if you feel that craziness, because it's quite easy to get caught up in there. This is a lot of fun buying properties, growing the business. What was the, there must have been a little voice or something that said this is too crazy. Let me say it was myself chasing to do the deal by this time, and effectively a family-owned company of this group, Tisland was obviously outside-sheld as well, but we still controlled it. Employing probably about 450 people, ultimately, depending upon the old geezer, so to speak. And those were things that were in my mind. Look, you've done so much, you've achieved so much here, but hang on, where'd you go to next, and hang on. You know, we've got the facility still to buy more, but should be buy more, because you know, this market goes up and down. And it was those sort of issues that really made me think, no, I should try and get a deal done with that I can sell, because the market is too hot, and I'm employing so many people. So, that's really the roots of why did the deal worked out perfect for the bank, because they got all their debt, we say this in an license, and all their debt was repaid. The fact is they're then loaned to the fall ad, but it was a very well-crafted deal. And I learned a lot about corporate life. Yeah, and still learning, I take it. Still got energy. So, that's clearly a highlight that could have, if you'd waited a little longer, could have been a low light of the career, I suppose, if you'd over expand. It could have, because the one thing that, you know, I look back as an innocent, one thing I've never thought would happen, and you know, I'd been building big projects in the UK, so I got used to being little into a sort of big-ish, but not big, big. I'd never for a moment thought that banks could go bankrupt, real banks, you know, we're not talking about secondary banks. That made me shudder, to think that my own bank, Bank of Scotland, who then with age boss, you know, merging with the Halifax, could go belly up. Yeah, and I look back and think you must have been naive, McCabe, but that's what happened. And the crash was really, principally, all about the big banks, the American banks, the UK banks, going belly up, that caused chaos. And you say that was sort of 2008. The cracks were there, back end of 2007. It all happened in 2008. And I reckon for us, you know, Scarborough as a Northern, because I still own the lights of Thought Park, it leads. It took from 2008 until probably 2014 for the market to begin again. Forget London, London's a different game. So that was a long, difficult period where literally big assets like Thought Park were static. And how do you manage that when you've got big assets? The market has just fallen away. How do you sit comfortably or uncomfortably with that as a business owner, as someone being responsible for a lot of people? Do you, does that cause sleepless nights? Well, I go back to the adapting to change, except circumstances weren't as they were. It's no good sort of morning and groaning. How are you going to survive? Because you know, real estate, to be in real estate is always big, big books, isn't it? It's not, we're not talking about building kitchen extensions. These are big projects. And in the case of, and this is exactly where we are today, we've got the good fortune, firstly, of not being over borrowed, so to speak. We've got a good fortune of developing and owning land and all property in the big towns and cities of the north of England, plus part in Scotland that we understand. So the in-between bit is obviously still working on all of those projects. No intention of building anything that's too speculative. Over the piece, we've also been successful in residential development, not house building, but apartment, so we're able to sort of be in the right city particularly managed to oblique sulfur to see properties that are successful. Properties that are successful for either owner occupation purchases or for BTR oblique PRS schemes. And we have those now, I mean, if you go to our scheme, managed it's a great scheme. We've got a second territory managed next door, but this year, sorry, yes, 2024, be a year of going through all the pre-development issues, activities, change of consent in some shape and form. To get ready to hopefully build in 2025 or it might take later. And just thinking about more recent issues that we've been through, Brexit, one COVID, the big one, and now feeling everything from those few days of trust in power, and all of that, how focused of you being as a leader and as a business on, I guess, keeping going. Did you ever down tools when times got hard, particularly COVID, when everyone seemed to down tools? Have you always been focused on, we just need to get this done? I don't think we've ever down tools, no. I mean, it has, and it is a worry, I think we've been blessed, wrongly blessed, by a very poor government, you know, too many prime ministers and chancellors who, and Brexit. Brexit is still an issue, you can still be queuing for hours and hours to get across the channel, can't you? So delivery of goods, yes, the construction side of doing projects now takes longer. The lockdown or restrictions on building sites, where in Manchester, for example, the lift that takes workmen from the ground floor to the roof that could take 30 workmen can only take three. You know, when you put it in perspective, there's so many issues that's cropped up because of the COVID, because of Brexit at the same time. The contractors have been the ones that have probably taken too big a beating, not the developers. We've maybe suffered through time-taking longer, but you know, I feel sorry for the contractors. It's been a tough call. And whilst we seem to have got rid of the COVID problem, we've not got rid of the problem problem, which is the government making poor decisions. Government's still not giving incentives to businesses to get back on the road, manufacturing and building is so important to the UK, it's the obvious. We need investment to keep on building. We need entrepreneurs and jobs, yes. Yeah, it's jobs on the building site, in particular, with sub-is and suppliers. And it's jobs for people who go into the buildings that you put up, whether it's offices or residential. Yep. We only have about 15 minutes left, 10 minutes left, which I'm sad about, because this is a really great conversation. I want to pick your brains on, I guess, maybe the three biggest highlights of your career, and then one or two failures that have actually taught you the best lessons. In business or property? Both. I think both are important. I think the highlight, of course, is where I've ended up being a bit different, is the character firstly, and what was my best way of expressing it. Our upsticks, if there's a challenge, our upsticks, I moved up to Scotland when I was young, recently married, my wife had to go up to Scotland, didn't end up not living in Scotland for very long, but upsticks to move to Stockton aunties, not the most desirable place on God's earth. And when I took this challenge to build big eye upsticks and went to live in Belgium, now who else would do that? Yeah. So those challenges, ones that I look back and think, not many guys would have actually taken this challenge on, and I succeeded with those challenges because of what they ended up selling to Australia, and it worked. So I'd say that's probably the highlight, the lowlights at the right word. Yeah. It is now. The lowlights have really come around sport and football and litigation, where I think the system of the UK is somewhat flawed, and the lowlights I'd also say, and it's not based upon sort of legal practice in London, they say there's some good people we deal with, in fact, I've got dinner with Warren tonight, but dealing with some of the legal people, I've got to say, has been very poor. That they've cost us north a lot through their poor performance. And this is Sheffield football club. Not a cricket club, strangely, if you never get more than football. Yeah. Hey, cricket's my favourite sport, believe me. I mean football, because it was born alongside Brahma Lane, which is Sheffield United's home, lest you forget, because you have, it was also Yorkshire County Cricket Club's home. So when it was a nipper, it was a three-sided ground, Yorkshire would play the cricket mainly at Sheffield rather than headingly. So I'd nip off the tram, trams in those days and pop over the turnstile and watch cricket free. Perfect. Perfect. So while we've been talking, as I often do, scribbling down, there are a few things that I think, and there are many things, but the few things that I've picked up that I've really enjoyed about your story, is, you know, starting right at the beginning, and your loyalty that you had to your mentor, and actually that creating an amazing opportunity for you, and the importance of loyalty, trust, and respect. Knowing what you want, and going for it, that seems to be a theme, an uping sticks, and getting a hands dirty and really understanding the business that you're building, starting on that construction site. I wonder if you could share with listeners, you know, if we're in the present day, there might be people who have only ever experienced free money, an easy-ish life, I know there's been permacrisis for the Gen Zedders. What would be your top tips, I suppose, for anyone who is sat here, sat in real estate today thinking, where's the world going to go, and how do I navigate it? Well, I suppose my attitude at the moment most certainly because it is trying times, you just get on with it, don't moan and groan, don't waste your days thinking you can't do anything, you can. Use your own abilities, and as a group of people, head boss still should retire, may say. Inspire colleagues, inspire your colleagues not to worry about the situation, because we're all aware of the problems, particularly for our real estate industry, get on with it. Let's have some humor around our offices, let's have a laugh on the joke, let's enjoy sport, let's moan about how bad man United dogs have, no simply whatsoever for man United. And literally just get on with it, and I suppose that's maybe the theme for my colleagues, we're going to come through it, we're going to come through it in a better club, sorry, a better company, we are adjusting, we are going to do different things in 2024 and beyond. And by the time then the market returns, we'll be a big accompany again, because we won't fail. So always understanding that it is cyclical. Yeah, and it means at time with some of my senior colleagues, I have to use the word no. Yeah, in other words, what we've got to do, every pound is a prisoner, we are going through a rock and roll period, we can't value our real estate in a proper way, because the market's like a jelly. And accept it, because we ain't going to change it quick shot, it will change, they take time, and it may come for reasons, and up to may come for reasons that we can't yet fathom, might be international money, I don't know. So don't stress your small stuff, control the controllables. Control the controllables and adapt, and you'll probably read on how we'll be adapting a few days or a few weeks hence. In the EG I hope. Most definitely. Fantastic. Kevin, this has been such a pleasure to talk to you. Thank you so much. I know we probably could have made this, I don't know, a four hour podcast and had a really good chinwag. Hopefully a tea's not gone too cold, but thank you for joining us. Sam, you made a wonderful Yorkshire brew, and if you don't mind, I'm going to call you a lass. Fantastic, that's a highlight of my career. Thank you so much. So there you have it. Lesson number one at the School of Hardknots completed. I hope that you've enjoyed the learnings as much as I have. Kevin's tale is inspirational and just reminds us to work hard, to work respectfully, and to try not to always take things too seriously. That's definitely a lesson I can take on more. But school is not out just yet. Coming up on the next episode of the School of Hardknots is a woman who almost gave up on her 18-year-old self-sambition with the coming of CEO of PLC. She'd already had a brilliant career and some amazing things, big deals, major projects. But like Kevin says, sometimes you've just got to go for it. And sometimes says how I'll work CEO. The drug that is property is just too hard to resist. You know, I look at this sector and it's a sector that, you know, I once described it's like property heroine. It's like, you know, it's like a love drug actually, because you realise that they're not so mean. Suggesting that people should take care of it. No, I'm not, no. But it's like, you realise there are so many things you can do. There are so many things you can be. Join us next time as the phenomenal Linda Schiller takes up her professorship in the School of Hardknots.