J3 Advisory sets sights on Scottish development market

This strategic decision appears to be motivated by several factors, including promising market prospects, favourable economic conditions, and specific project opportunities. It underscores J3 Advisory’s recognition of the growth potential and profitability within Scotland’s development sector, as the firm positions itself to seize these opportunity

The co-founder and managing director of J3 Advisory, Jack Bristow, explains that the company enables regional developers, SMEs and property professionals to make better and swifter decisions when it comes to latent defects insurance and structured property finance.

J3 was set up three years ago and its essential aim, he says, is to simplify and demystify the insurance and funding markets for developers and property investors.

“There’s a shortage of good and pragmatic advice for developers when it comes to arranging finance and insurance and asking the correct questions that allow them to pinpoint precisely what they need,” he says.

“With regards to loans and structuring debt there’s quite a lot of smoke and mirrors and potential for confusion in the funding market – so it takes someone like us to stand independently, to understand the business and also to be able to simplify the solutions available from a funding perspective.”

With more than 20 years working between both the insurance and finance markets, J3’s leadership team (Mr Bristow, Johnny Leadsom and James Mole) have discovered that two disciplines which should interlink easily are frequently and often unnecessarily fragmented and disconnected.

This results in a costly loss of time, with delays in both insurance and funding as neither side communicates effectively with the other. Addressing that dilemma is the team’s speciality and it’s an approach J3 is increasingly employing in Scotland.

“The premise and mission of the business is to communicate effectively and cultivate strong relationships with developers, lenders and property professionals to make their life easier and hopefully help them go further faster,” stresses Mr Bristow.

“This should avert a common situation. Perhaps you’re converting a bank building in Edinburgh to residential use or constructing a high-end suburban home, or are going to build a student accommodation scheme - All these developments require unique approaches and expertise.

“Inevitably, most insurance and funding partners will claim they’re the perfect fit for each project. However, the truth is not every provider is a perfect match. As a result, development teams often find themselves investing precious time completing numerous forms for providers who may lack the necessary appetite or expertise for the particular project at hand.

“Our job in that instance is very simple and when we engage with clients, we’ll be asking them questions to understand what is being built and what the previous approach to insurance has previously been.

“Then, once we have a feel for the developer and their projects, we can advise them as to the providers they can go to.”

Perhaps some of the names they have previously worked with simply haven’t got an appetite for a particular scheme. “So that’s where we can help with a time-saving exercise which additionally gives a level of comfort – so that the client knows they are dealing with people who have proven expertise in that area in the same way as their in-house team would do,” he says.

Having a finance and insurance advisor in J3 is effectively acting as an extension of your own business. “In an ideal world, that’s where our role sits because we’re motivated by depth of service: we realise there’s a role for a phone or Zoom call but ultimately we like to see you and shake your hand,” says Mr Bristow.

He adds: “We build our credibility through the questions we ask. Some of those are straightforward and some of them are challenging but they need to be asked with regards to risk mitigation strategies, the developer’s appetite for risk and the types of insurance partnerships they’ve embarked on before – what has worked and what hasn’t?

“We’re very motivated and interested in depth of service and we have some of the best people on both sides of the business which allows us to uniquely position ourselves to be able to say we have the relationships, the understanding, and the book smarts with regards to what we’re doing.

But we also have the practical experience to say we’ve executed on this before not only for your counterparts and industry peers but also your competitors.”

J3’s experience in Scotland he reports has been encouraging. In November last it was instructed by AMA Homes to place structural warranty insurance on its £24m Belford Road scheme in Edinburgh.

The policy will provide cover for any damage resulting from defective design, workmanship, or materials after practical completion.

“That was a mixture of new buildings and a lovely conversion next to a railway bridge on a sloping site – which was interesting from an insurance perspective but also involved working with an incredible developer and professional team on that job which I think should be coming to that practical completion in the spring,” says Mr Bristow.

“We’ve also done schemes with Square and Crescent in the city so are deeply rooted with the developers in Edinburgh and are working on schemes for large, national developers in Glasgow across residential and purpose-built student accommodation.”

This involves J3’s increasing presence north of the border, with them making visits that now span several days speaking to professionals in the sector and it is considering an office presence in Scotland to cement its commitment to the market.

“Scotland is an exciting, mature market and one in which you’re dealing with experienced developers and operators, which is where we add the biggest and the truest value,” he says.

“We want to continue to build on that and build our network out and do a good job for the developers and property professionals in the region. We’re planning several events in Scotland in 2024 and giving people the best advice we can offer is certainly part of the blueprint for this year and going forward.”