58 commercial property
Developing lasting relationships
Strong relationships are long-term affairs founded on trust, empathy and understanding. They take time to develop and can only survive with good communication
If that is true in a social sense, then it’s even more important in the business world, where decisions are based not just on balance sheets and business plans but on more intangible ’human’ factors.
In the case of British Solar Renewables, managing director Angus Macdonald’s relationship with Barclays has seen the bank support all three aspects of his expanding company in a way that reflects the time and effort spent getting to understand his business.
“Relationships like this are built on mutual trust which is based on delivery from both sides. The client has a plan and the bank has the money to support that plan. We lend the money and the client does what he said he would do. Yes, we are selling a commodity but we don’t do that without the confidence that comes from a broad-based relationship.“
Having supported Macdonald’s property development arm, Barclays’ agricultural team then provided the funds for a number of projects at Higher Hill Farm, where Macdonald is still closely involved in the family business.
His love of the land and the environment – allied to a smart business brain and his construction knowledge – all came together in support of his next move, which was into the relatively new technology of large-scale, ground-mounted solar arrays.
“I have long had an interest in conservation and in the benefits of renewable energy, and with property going through a tough time and a background in construction, it seemed like a logical step,“ Macdonald explained.
Angus Macdonald
The most recent support has seen Barclays refinance a number of large-scale solar arrays, a relatively new field where other lenders might find themselves in unfamiliar territory.
It was in the more mainstream area of commercial property development that Macdonald first met relationship director Lewis Cartwright.
“Early on when talking to Lewis I remember him telling me that he looked forward to the day when Barclays had the opportunity of investing in all three legs of my business,“ said Macdonald.
Barclays invested £9 million – now fully repaid – in supporting Macdonald’s property investment interests at the prestige 28-acre Mount Wise village in Devonport, Plymouth, which now boasts 450 homes, offices, shops and even its own village cricket pitch.
“It was a difficult time for residential development, but Lewis had an existing relationship with Macdonald and so we backed the Mount Wise scheme,“ explained Mark Stuckey, head of real estate for Barclays’ south region.
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British Solar Renewables won permission to build three solar parks on land already in the family’s ownership – two five megawatt schemes and a smaller 0.75MW array – and used a joint venture partner to fund the projects.
“Each of the larger arrays generates enough electricity to power 1,500 homes for a year,“ explained Macdonald. “In addition they will save 55,000 tonnes of CO2 during their lifetime.“
The arrays are unobtrusive because they sit reasonably low to the ground, and they are ideal for a sheep farmer like Macdonald as his 300 ewes enjoy the shade and the protection from the rain while doing a great job of keeping the surrounding grass well mown.
“Sheep make great lawnmowers. In effect a solar farm is simply a modern-day orchard,“ said Macdonald. “Most people wouldn’t even know it was there, but meanwhile it is delivering low- cost energy into the National Grid and helping the environment by reducing the nation’s greenhouse gas emissions.
British Solar Renewables is now expanding its operation and is looking for other sites, offering farmers a risk-free, predictable income in return for a 25 to 28 acre field suitable for a 5MW installation.
Macdonald has set up his own joint venture company, RRAM Energy, to invest in the schemes, which it commissions from British
THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2013 Mark Stuckey
Solar Renewables, rapidly becoming one of the biggest names in solar arrays in the UK.
Once the schemes are up and running and generating a return from the Renewable Obligations Certificates (ROCs) that have replaced the system of Feed-in Tariffs (FiTs) that used to produce an income stream, they are re-financed by Barclays to allow RRAM Energy to realise its investment and look for the next opportunity.
“We have now refinanced five solar parks built by British Solar Renewables“ explained Stuckey. “As his focus has shifted across his three areas of business, so our relationship has grown and our support has continued.“
Macdonald estimated that Barclays’ support for his ventures stood at between £15m and £30m in any one year and added: “In my view, the Barclays approach represents proper relationship management.“
Details: Mark Stuckey 07827-807751
mark.stuckey@
barclays.com
The views expressed in this article are the views of the author alone and do not necessarily reflect the views of the Barclays Bank PLC Group nor should they be taken as statements of policy or intent of the Barclays Bank PLC Group. The Barclays Bank PLC Group takes no responsibility for the veracity of information contained in the third part guides or articles and no warranties or undertakings of any kind, whether express or implied, regarding the accuracy or completeness of the information given. The Barclays Bank PLC Group takes no liability for the impact of any decisions made based on information contained and views expressed.
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