Hale Village is an ambitious, large-scale residential regeneration project in Tottenham, North London. Its facilities, architecture, green spaces and environmental credentials (rated BREEAM ‘Excellent’) have created a new eco-district comprised of 1,200 homes 32,000ft2 of offices, high quality public realm, community facilities and associated infrastructure. K2CM were brought in at a critical point to keep the project moving.??
Owned by Lee Valley Estates, the project encountered challenges during the 2008-2009 global financial crisis, when bank funding was abruptly withdrawn. The economic downturn rendered the developer unable to proceed with the project using conventional contracting methods, potentially bringing the entire development to a standstill.?
K2CM’s highly collaborative, financially transparent approach provided a solution that kept the vital regeneration project moving forward. Construction Management facilitated phased development to effectively manage and mitigate financial risks, allowing for incremental progress. CM also attracted trade contractors who were willing to work with flexible funding models, critical in a challenging economic climate.??
The steady provision of fully serviced plots significantly reduced risk for future developers and made the subsequent phases more attractive for investment, which ultimately led to the project navigating the financial crisis though to a successful completion.
How K2CM delivered for Hale Village:
K2’s Construction Management approach proved absolutely pivotal in enabling the project to continue as traditional financing avenues disappeared. K2CM allowed Lee Valley Estates to establish direct relationships with trade contractors who were willing to proceed with work as and when funds became available, critical in the volatile economic climate. This innovative approach facilitated the project being broken down into manageable phases, which not only reduced the overall financial risk over time but also ultimately paved the way for future refinancing and the successful completion of the entire development.
The groundwork and infrastructure delivered through CM provided a significant benefit by creating fully serviced plots, thereby reducing risk for subsequent developers and attracting further investment into the regeneration area.
The overarching target for the Hale Village project was the delivery of 1,200 homes. While the financial crisis inevitably impacted original timelines, K2’s Construction Management approach was instrumental in allowing phased progress to continue, crucially preventing a complete halt to the entire development.
The Construction Management model implemented for Hale Village necessitated direct and constant communication with all trade contractors. This direct engagement was crucial in fostering a flexible and adaptive environment, which was vital for allowing work to progress incrementally, contingent upon the availability of funding.
The maintenance of strong, transparent relationships was absolutely essential to ensure continued contractor engagement and commitment throughout the project’s protracted and phased development.
Hale Village might have seen contractors walk away when funding faltered, but K2CM’s collaborative ethos ensured that the teams remained aligned and committed to the project’s success, demonstrating its capacity for team collaboration, even under duress.
Value of K2CM to the Project:
-> Enabled project continuation despite the financial crisis, providing a lifeline for the development.
-> Facilitated phased development to effectively manage and mitigate financial risks, allowing for incremental progress.
-> Attracted trade contractors who were willing to work with flexible funding models, critical in a challenging economic climate.
-> Provided fully serviced plots, significantly reducing risk for future developers and making the subsequent phases more attractive for investment.
-> Allowed for refinancing opportunities after initial phases were successfully completed, providing a pathway to full project realisation.
-> Offered greater control over costs by enabling direct relationships with trade contractors and transparent financial management during a crisis.
Why the client chose K2CM:
-> Withdrawal of traditional bank financing: The most critical reason was that traditional bank funding was limited due to the financial crisis of 2008-2009, making conventional contracting methods, which require complete upfront funding, unviable.
-> Need for financial flexibility: K2CM provided the necessary flexibility to work with available funds in phases, allowing the project to continue incrementally rather than halting entirely. This adaptable approach was crucial when faced with an unpredictable funding landscape.
-> Desire for direct relationships with trade contractors: The client wanted to maintain direct engagement with trade contractors, which K2CM facilitated, as opposed to being bound by a single main contractor. This direct relationship allowed for more agile negotiations and continued work.
-> Risk mitigation in uncertainty: In an environment of extreme financial uncertainty, K2CM’s ability to break down the project into manageable segments and address risk on an ongoing basis was paramount.