Shaper: Nigel Henry

Show aired on 13th October 2018

Transcript

Elliot Moss
Welcome to the Jazz Shapers podcast from Mishcon de Reya. What you are about to hear was originally broadcast on Jazz FM however music has been cut or shortened due to rights issues.

Welcome to Jazz Shapers where the shapers of jazz, soul and blues, and business come together to share notes. I am Elliot Moss and I am really pleased to say that our guest today is Nigel Henry, Co-Founder of Fusion Students, developers of and investors in purpose built, managed student accommodation in the UK. Founded in 2008 on the belief that student living should be about people and experiences, not just rooms and buildings, Fusion Students has developed a portfolio in some of the top student cities across the UK. The company is growing rapidly, it is now one of the largest private companies in the sector with a built and pipeline stock of nearly 5000 rooms and approaching 2 million square feet. With thirty years in the industry, Nigel focusses now on the finances and the corporate side of the Fusion Group which includes Fusion Residential and he is also Trustee of several charities. He’s quite busy. It’s a real pleasure to have you on the show, thank you so much for joining.

Nigel Henry
Thank you. It’s a pleasure to be here.

Elliot Moss
Now tell me, you have done many, many things before you became a successful property developer and we’ll talk a lot about where that business has gone from the world of residential into the world of students and why you have alighted there and all that. But, cast your mind back to how you felt when you left school because I believe you left school and you went straight into the world of work. What was in your mind then? What did you want to go and do?

Nigel Henry
At that time, I think I just wanted to make money. I was lucky enough when I was at school to work at weekends in the markets and was doing really well there and thought this is a great future for me, and my teachers who told me that I really should be staying on, when I looked at what they were earning compared to what I was earning on a Sunday, I thought what do they know? So, off I went into the world with my little red cash book, started my market business and a year later realised that the teachers, actually, they were a lot smarter than I was, or I still am. So, I wasn’t brave enough to go back into school which I probably should have done. I looked around, spoke to various friends, what should I do? I had one friend who was an estate agent and she told me I would absolutely love it. Interesting enough, when I look back at that time I had a vision of an office job as being stuck in a small room and not talking to anyone and that’s why if you come into my office now it’s full up with people doing work experience every summer so they can learn what work is all about. In the world of estate agency I was selling houses, selling flats, then moved into the development world selling development sites, investments and sitting there every evening wondering if I could do it better than my clients and eventually, after just getting married in 1988, I started on my own.

Elliot Moss
And how long were you in the estate agent business before you made that call?

Nigel Henry
About five years.

Elliot Moss
Okay, so go back to the market just a sec because I am really interested. What didn’t you like about it Nigel? What was the…?

Nigel Henry
It was a little bit chilly in the winter.

Elliot Moss
As simple as that?

Nigel Henry
And, there were two great days, and five very bad days, and I realised quite quickly that this is a great place to earn a living but not a great place to build a business.

Elliot Moss
So, I now want to go back into that 1988 moment and you decide the wondering is going to stop and you are going to go for it. Did you need, did you have money to go and start your first or buy your first site as it were, buy your first property?

Nigel Henry
No.

Elliot Moss
So, how did you do that?

Nigel Henry
So I started, and it’s quite interesting because I have gone round in a really big circle without realising it, we started by renting upper parts above shops, so at that time your commercial investors that owned shopping parades, they were really just interested in their retail area on the ground floor, they weren’t interested in what was above. So I would lease their upper parts with a six month rent free which allowed me to then go in there, tart them up and re-let them as bedsits, so I wasn’t a property owner for the first few years, it was purely an income related business.

Elliot Moss
Was there a moment when you went do you know what, I can make this bigger, I can do something else, and if so what prompted that thought because often when I talk to people there is no epiphany, things just evolve. Was there an epiphany or was it just an evolution?

Nigel Henry
I think that business has evolved over the years and we’ve moved it forwards, slowly, and often I have looked at competitors and thought wow, they’ve expanded so quickly, why aren’t we doing it as quickly as that and then when they go bust a year later I realise that maybe we have got something right, but there was a great moment for me which was about eight years ago when I was sitting in a business conference and people were asked a very similar question, what was there that changed your business life, and a line that someone said was ‘I get up in the morning now and I want to add a zero onto everything I do, and life has become simpler’, and interestingly for us as our business has expanded our developments have got bigger and we are dealing with more professional people be it from lenders to construction companies, life does become a little bit simpler. So, if there was a great moment, albeit it wasn’t at the beginning of my career, that was pretty special when I heard that.

Elliot Moss
But casting your mind back to that point where you are managing that six month rent free period…

Nigel Henry
Yep.

Elliot Moss
What’s the moment when you move into ownership rather than playing at the edges as it were?

Nigel Henry
As soon as we could afford to. It was as simple as that. The ambition always was to be a property owner and as soon as I could afford to I started buying, I was then very lucky enough to have someone who invested in our business on a deal by deal basis and helped us expand and who we worked very closely with for ten years, who is still a very great mate of mine, and that really gave me the opportunity to take the business forward at probably quite a young age.

Elliot Moss
Did you have a sense, because obviously you hadn’t, I mean you have now worked in property most of your working life so you know what’s going on, in those early years when you probably knew less, how did you navigate? How did you make sure you were working with the right people, that the money was right, that the site was right? Because it’s, from the outside people look at the property or they go ‘It must be pretty easy, I mean they all look like they are doing well’ and the reality is that for every, you know hundred people that have a go there’s probably one or two that a really, really successful. So what do you was it about you that enabled you to be successful?

Nigel Henry
I think I came from a property background. A lot of people that are in the property world may have been very successful in another business, sold that business, have an amount of cash, they’ve all bought and sold an odd house, maybe an office building, and therefore they think they are fully equipped to go into the property world which, as you rightfully said is not quite as simple as it appears to be from the outside. So, I think the background, that’s all I really knew apart from my year in the market so it’s all I knew, I loved the property world and I love ready about it and understanding about different deals and even when I was renting upper parts I was learning and understanding about the bigger deals that were going on in the UK, outside the UK, so it’s my passion, it’s my passion, it’s my hobby, I have always worked in it and I think a real good gut feel, it’s, yeah, both my partner and I in Fusion, we’re not the smartest boys in the world, far from it, but I think we both of us got a good gut feel for who we are dealing with and what we are dealing with.

Elliot Moss
Stay with me for much more from my Business Shaper today, humble too, it’s Nigel Henry. He is talking about gut feel and being a student of a business that you are interested in, that’s what it sounds like, you’ve been over the years and continue to be so. Much more coming up from Nigel but first, let’s hear from one of our partners at Mishcon de Reya with some advice for your business.

There are many ways for you to dip into the rich pool of former Jazz Shapers and indeed hear this programme again as well. You can ask Alexa to play Jazz Shapers and there you can hear many of the recent programmes, or if you pop Jazz Shapers into iTunes or your preferred podcast platform, you can enjoy the full archive. But back to today’s guest, it’s Nigel Henry, he is Co-Founder of Fusion Students and that’s actually where I want to go to now Nigel because we talked about property in general and that’s your business was residential mainly, I think, if I understand that correctly?

Nigel Henry
Yes, that’s correct.

Elliot Moss
And then you had a bit of a pivot, is what they would call it today but they probably didn’t call it that at all in 2000 whenever it was a few years ago when you sort of switched your focus into students. What made you do it then and explain a little bit about what you are actually up to?

Nigel Henry
So, at that time my business partner and I had a joint venture being Fusion Residential but we were both involved in several other development businesses and one was asked to help and participate in a student scheme and at that time Warren and I, our desks were half a metre away from each other and I became very involved in it although it was through his company, and about a year later Warren and I had decided that we wanted to do everything together going forwards and how could we use both of our brains to have a great business and do something we absolutely love and were passionate about and the student business came from there. So we had both been involved in this one project, him more than me, and off we went.

Elliot Moss
And, why students at that point? Again, people think about trends and what they spot in the market? What was apparent to you that ensured that there was going to be this focus?

Nigel Henry
I have lived through the property residential development world for thirty odd years, quite frightening, and I have seen in that time residential developments go from being what I would call boxes built by your older house builders, well known house builders, to designer homes, and in the student world at that point, there was a couple of designer homes but very much boxes and the main players, the main investors, developers in the market, were building very, very standard properties whereas our kids now of university age, they don’t want standard any more, so we looked at the whole market as what can be done better and through bringing in some amazing social spaces, lots and lots of events and really looking at building communities, we saw that as a real future. So that was one side and the second side, looking at it financially, was at the time we started it wasn’t what we call direct lets, letting flat 1 to a student, flat 2 to another student, it wasn’t recognised as a suitable asset class for institutional investors, and we saw that that has to change. Luckily enough in the last few years it has changed and that’s affected the values quite a bit which has been good for people like us who were already in it, harder now maybe to buy but better for early players.

Elliot Moss
You make it sound very simple, they were basically bog-standard places in the world of students, we decided we were going to do something special. I mean that’s a… it’s sort of again as I said it, on the surface of it you go ‘makes perfect sense’ but to actually deliver that, was there any other set of skills that you needed beyond what you already had?

Nigel Henry
The skills that we had from our background was very much designer homes, we have always been at the upper end of the market, Fusion Residential, and the early businesses that both Warren and I have been involved in have always been at the upper end so we knew and understood design, we knew and understood construction but the construction we understood was building five houses here, then flats here, we are now building huge towers of 600/700 units, we have just got planning for a scheme of almost 900 units which is a mixture of co-living and students, so we didn’t have that expertise, so we’ve had to bring in some expert construction expertise, our back office is now full of accountants so we’ve got 6/7 accountants in our office whereas before we had one, so we’ve had to really look at the whole set up of the business and we are now bringing in our own management platform so that’s even more people, so we were never looking to have a lot of people but we feel to do what we want to do and be the best in it and have a really longevity in our business, we need to control as much of the day-to-day running of the those buildings in-house which we are now doing. We are bringing in quite a lot of skill and we’ve brought in the most amazing woman to run the management platform for us so bit by bit we are bringing in the right expertise. I think, going back to an earlier question, what are we good at? I think we are good at recognising what we are not good at.

Elliot Moss
Good advice as well for anyone listening. You are running a big business now and there’s big numbers, you said earlier about add the nought on and life gets simpler, in a way that’s true and in a way that’s probably not true in the sense of complexity and the stakes. How do you manage your own state of mind when you are now dealing with hundreds of millions of pounds rather than even a few thousand or a few hundred thousand, and how do you deal with the fact that you are now responsible for many people’s livelihoods because there is only so many bosses, only so many owners, and you are one of those and it is a privilege I know, but are you alright with that or do you get wiggly and nervous sometimes, do you wake up in the middle of the night go eurgh? Or is it not like that for you?

Nigel Henry
I try not to do wiggly or nervous. No, I don’t, to me it’s a number, the value of the business, the value of the transactions we do is an irrelevance, we love what we are doing and I know I speak for probably everyone in the business, we just love doing what we do so I don’t think anyone sees it as an issue, if we saw it as an issue, as a challenge, as something that made us nervous, we fortunately had quite a few approaches over the years, we find someone to take our problem off our hands but we love doing what we do, the issues of having greater staff, greater numbers of people as well living in our buildings and the responsibility there, I think there is a responsibility, a huge responsibility with the buildings and looking after everyone’s welfare there that we take really, really seriously but we have great training internally and to our building managers to make sure we are okay there, well more than okay, and internally we do a hell of a lot with our staff as well, I think we are a pretty good employer, we have weekly massages, we have life coaches, we have, I think they had a film day for two hours earlier this week, my partner showed them a film The Greatest Showman.

Elliot Moss
Oh, it’s brilliant, don’t get me going. You know when you get a song in your head, I’ve had the songs in my head, I cannot get them out.

Nigel Henry
Okay.

Elliot Moss
So. Does anyone do any work? Sounds like a holiday camp.

Nigel Henry
Hopefully. The odd little bit seems to happen in between.

Elliot Moss
In there. When you set out obviously look you left school and you have been very honest about the fact that maybe, you know, if you had been braver you would have gone back. Would it have made any difference, I mean, would you still be doing this? Because it sounds like you are happy as Larry.

Nigel Henry
I, very happy, haven’t been to work since, for thirty years.

Elliot Moss
But was the ambition to get here, I mean you didn’t visualise, did you visualise where you are now?

Nigel Henry
No, no I think that the reality is I thought I would always be developing a few houses a year and really enjoying myself and I am now really enjoying myself even more and I think it’s just happened but as it’s happening and we are realising that what we are able to do we now want to take it further, we are now looking to take our business out of the UK, we have been spending quite a lot of time in Europe, I had a meeting this morning where somebody has flown over from Australia and Canada we are looking at and we have someone from our office in the States at the moment so that’s next thing that we find really, really exciting and want to get on with.

Elliot Moss
There’s no end to the ambition of Nigel Henry…

Nigel Henry
No, all great fun.

Elliot Moss
…and friends. Final chat coming up with Nigel plus we will be playing a track from Marcus Miller and Corinne Bailey Rae, that’s in just a moment.

That was Marcus Miller and Corinne Bailey Rae with Free. In a few minutes Nigel Henry will be free. He will be leaving so I am going to have to rush him with a couple of quick questions. Firstly, money. You are obviously doing alright and people have funny relationships with money, or different relationships. You said to me before, doesn’t matter how big the deal is, it’s the same thing, I don’t think about it. Is it the same for you personally and your own comfort levels and stuff, have you got a number in mind when you go, I’m going to stop or is it just not like that?

Nigel Henry
It’s a hobby, I wouldn’t say I get up in the morning for the money, I get up because I love doing what I am doing and my biggest fear in my life is will I ever be able to retire because I love doing what I do so much. So, it’s not about the number.

Elliot Moss
And related to that, if it’s not about the number I know that you are a very charitable person, you are involved in a bunch of stuff, you are Chairman of Langdon which is about helping young adults with learning difficulties, you are on the Council membership at the Jewish Leadership Council I believe?

Nigel Henry
Yep.

Elliot Moss
You do stuff, and where does that come from? Is that from family? Is that from Nigel himself? Where’s that sense of wanting to do good things?

Nigel Henry
It’s something that I learnt from my parents as a kid and used to call my dad a busybody when he was involved in very many things and look at me now? Yeah, it’s as much time as I can spend with Langdon, which I have been lucky enough to be involved in now for ten years, the better. It’s something that I absolutely love doing and love being involved in and love seeing what a difference we can make to people’s lives.

Elliot Moss
Do you integrate that kind of approach to your work as well and to the way you treat people? Do you think you do?

Nigel Henry
Well, we have two people from Langdon who work in our office and, yeah, I’d like to think so, I’d like to think that we want to give people the best opportunities in life, be it people in our workplace or people within Langdon, anyone we come across, what can we do to help them? You know, I’ve been lucky enough to have a few people help me over the years and if I can pass that on it’s a wonderful thing.

Elliot Moss
And when you are not in the room, Nigel, what do you think the team say?

Nigel Henry
It’s a very good question and you’ll have to ask the team but hopefully, hopefully most of them like me.

Elliot Moss
I am sure they do. You seem very likeable. Listen, it has been a real pleasure talking to you today. Thank you for your time. Just before I let you go, I need to ask you one more question and this is easy, what’s your song choice and why have you chosen it?

Nigel Henry
So, my song choice is Stevie Wonder, I Just Called to Say I Love You. About thirty years and six months ago, that was the song that I opened, or my wife opened it because I can’t dance, I was treading on her feet, at our wedding, our wedding dance.

Elliot Moss
We hope you enjoyed that edition of Jazz Shapers. You will find hundreds of more guests available to listen to in our archive. To find out more just search Jazz Shapers in iTunes or head over to mishcondereya.com/jazzshapers.

Nigel Henry

Nigel left school at 17 years old to focus on sales. By 22, he became the leading estate agent in Hampstead helping developers acquire buildings for redevelopment. In 1988 Nigel got married and set up his own property trading business. The first deal he bought was a one bed flat in Wembley, renovating in the evenings, tidying up after the builders and decorating until the early hours of the morning. By 1995 Nigel had a growing portfolio, including his first residential new build project of five cottages and later the conversion of the old Blue Note Club to the first ‘sexy’ loft scheme in Hoxton Square. In 2006, after 15 years of joint venture deals with Warren Rosenberg (they met in 1988 both on their honeymoons), Nigel and Warren set up Fusion Residential; creating homes for footballers and wealthy downsizers. Nigel’s daughter Emma now leads the Design team. Later in 2013, Nigel and Warren started a further business, Fusion Students, the UK’s largest privately-owned investors. Fusion are recognised as best in class for their design, attention to detail & creating a remarkable student experience. The size of developments has come on now since 1988 as Fusion build schemes of 350 to 1000 homes and the group sales in 2018 are predicted to exceed £300m. In addition to the UK, Fusion are now looking in Europe, Canada, America & Australia. By 2025 they aim to be the go to brand for students globally.

“I was at school to work at weekends in the markets and was doing really well there and thought this is a great future for me.”

“I realised that the teachers were a lot smarter than I was.  I wasn’t brave enough to go back into school which I probably should have done.  Instead I spoke to various friends and one told me I would love being an estate agent.”

“In the world of estate agency I was selling houses and flats, and then I moved into the development world. I wondered how I could do it better and, eventually, I started my own company.”

“We started renting above shops. I wasn’t a property owner for the first few years; it was purely an income related business.”

“Interestingly, as our business has expanded, life has become a little simpler.”

“I was lucky enough to have someone who invested in our business… and that gave me the opportunity to take the business forward at a young age.”

“We were never looking to have a lot of people but to do what we want to do, be the best in it and have a longevity in our business, we need to control as much of the day-to-day running of the those buildings in-house, which we are now doing.”

“To me the value of the business is a number, the value of the transactions we do is an irrelevance, we love what we are doing and I know I speak for probably everyone in the business when I say that.”

“There is a huge responsibility with the buildings and looking after everyone’s welfare. We take it seriously and we have great training.”

“I wouldn’t say I get up in the morning for the money. I get up because I love doing what I am doing and my biggest fear in my life is ‘will I ever be able to retire?’, because I love doing what I do so much.”