Property boss pledges £100m to flexible office business plan
Publisher The Herald
LEADING entrepreneur John McGlynn has pledged to double investment in his flexible work space business to £100 million.
Mr McGlynn said there was “huge demand” from small businesses to move into Storage Vault Work Space units.
The model sees the company acquire freehold commercial and industrial buildings, which are refurbished and let out to small businesses on flexible monthly contracts.
The team at Storage Vault Work Space is led by Brian Gifford, property and finance director, Anthony McAteer, managing director, and Kraig Martin, commercial director.
“The guys have got a schedule to buy the site, land bank the site, spend the investment on refurbishment and get on with it,” said Mr McGlynn. “They’re way ahead of schedule so it’s fantastic news.”
He said a £50m investment, revealed last year, was just “phase one”.
“That £50m is going to be £75m,” said Mr McGlynn. “I’ve already told the guys when that first £50m runs out there is another £50m for them. We are heavily committing to this sector for a long time.”
Mr McGlynn said the investments were amortised over 25 years, in a model he refers to as “patient capital”.
“If someone says it’s a long-term play where we won’t see anything for three years, that’s fine. It’s just delayed remuneration, we’re going to be here for 25 years and that’s the way we play it.
“There are two types of investments, you’re either playing for revenue or you’re playing for capital. Of course you need revenue, but we are long-term capital investors.”
He said the success of the venture, proved there was optimism in the economy. “All you hear on the news is people talking down the economy. Actually, the proof on the ground is that if you build the right product and promote it in the right way there is huge demand,” he said.
Last week a Cambuslang facility was officially opened after a £3m investment. Mr McGlynn said that take up rates across the three buildings within the facility were a full year ahead of target.
The Cambuslang site is the third to officially open, along with Paisley and East Kilbride. A second site in Paisley is operational, and further sites are in process, including Coatbridge and Kilmarnock.
Mr McGlynn made his fortune through Airlink Group, which owned and operated car parks around Glasgow Airport, close to his home town of Paisley.
In 2014 and 2015, Mr McGlynn sold a number of sites and operating companies of the group to Park First, the global property group.
Subsequently he has focused on commercial property interests, and private equity through his Scottish Capital business.
However Mr McGlynn said that Storage Vault Work Space now takes up between 80 per cent and 90 per cent of his working time.
A founding director of Entrepreneurial Exchange, Mr McGlynn started his first business from a law school library.
“When I was a student setting up my first business, it was a 30 page lease,” he said. “Three month deposit, three months’ rent in advance. Frankly, no small company has got six months’ funding before they even start trading.”
The aim of Storage Vault Work Space is to provide flexibility to new businesses. Mr McGlynn said: “For someone who wants to start or grow a business and requires premises, the easier we can make it for them the quicker they are going to grow.”
Shared work space is a growing trend among Scottish start-ups, having migrated from New York via London. While many such spaces, such as The Whisky Bond and The Tontine, focus on the tech sectors, Mr McGlynn said his business targeted companies requiring more physical space.