#28 Paul Higgs MRICS: PropTech & Sustainable Development Models

**Zeus Hernandez** (0:00)
Welcome back to the Infinity Podcast. Today, I'm joined by Paul Higgs, a veteran developer, chartered surveyor, and one of the most respected land specialists in the UK. Paul is the founder of Milbank Group and Milbank Land Academy, where he's helped unlock over 7,000 homes and millions of square feet of commercial space through innovative land, planning and development strategies. He's also one of the founding investors in LandTech, the PropTech pioneer behind Land Insight, and more recently, the co-founder Viability, a new platform aimed at sustainable development decisions. Paul, thank you for coming on. It's a pleasure to have you on.

**Paul Higgs** (0:35)
Thanks for having me.

**Zeus Hernandez** (0:36)
Awesome, Paul. So for the individuals listening to us, who do not know your background, how you got started in development, could you give us a brief overview?

**Paul Higgs** (0:44)
Yeah. So I wanted to be a developer since I was a kid. Although to start with, I didn't really know what it was all about. I thought it was all about construction. So I started off studying construction management. I became a site engineer and then a site manager. And on the side, that was sort of like my day job, evenings and weekends, I started off doing houses up. So small refurbishments, things like that. And I slowly built up to bigger deals and did my first, built my first new built house in 1988
And over those first five years or so in development, I started to realize that certainly in the UK, development really is all about understanding land and planning inside out. So spent the rest of my career trying to make myself a bit of an expert in that stuff.

**Zeus Hernandez** (1:43)
You mentioned the RBS collapse previously when you first chatted. Can you tell us more about that and how it affected developers over in 2008?

**Paul Higgs** (1:52)
Yeah, so certainly in the UK and obviously all around the world, 2008, the global financial crisis was seriously painful for lots of people, including developers. Basically, the banks ran out of money. Now, at that time, 80 percent of my deals were actually funded by RBS.
They were probably the worst people you could have been with in terms of development funders because basically they didn't really care about their customers or clients or developers. They basically just did anything and everything they could to stop funding deals and get as much money back in as possible. So they pulled the plug on all the developments I had ongoing with them at various stages. So that nearly sent me bankrupt actually. I literally survived bankruptcy by the skin of my teeth. I basically sold everything I owned and everything that I'd built up over the previous 20 years really in order to pay people back, make sure no consultants, no contractors, no one else lost money, only me. But that nearly wiped me out. It was only fortunately that one of my deals was funded by close brothers, who are a really reputable development funder, probably the best in the UK actually. That one deal actually saved me and helped me survive and then carry on when things picked up.

**Zeus Hernandez** (3:30)
Do you think this event that happened to change your perspective on development, you need to be more careful or just planning for contingencies in general?

**Paul Higgs** (3:39)
Yeah, well, you know what, it's an interesting one. And I was talking about this to someone just yesterday. I have always been very, very detailed and very risk averse. And strangely, that actually worked against me. So my whole model has always, my whole career has been to find off market sites. So there's very little competition and I don't get sucked into situations where I'm bidding the land price up before I've even started. So I've always focused on off market deals, and I've always focused on adding maximum planning and design value. So that means, you know, I'm never paying too much for stuff. And I've largely, certainly I did an element of de-risking things before I've even started. So, you know, I've created a little bit of an insurance policy. So I've always got a load of equity, even if it's only sort of like notional equity or value in the deal. And on top of that, I've always put in a reasonable amount of my own equity so that I've been quite lowly geared. You know, I've not been borrowing at really high, high, high levels.
Weirdly, in 2008, that actually worked against me, because what that meant is that there was a lot of value and there was a lot of equity in my deals. So RBS could pull the plug, take them off me, sell them, get all of their own money back, plus some. So those deals were actually the first ones to go. If I'd been borrowing 95% plus from the bank, so I'd owed them a lot, a lot, a lot of money, which lots of people did, in a weird way, I might have survived better off. So, you know, I still wouldn't get overly geared, but it's interesting that actually thinking that I'd been sort of super risk averse and I was doing the sensible, safe thing actually worked against me.