We’ve recently exchanged contracts for Oxygen Conservation’s tenth land acquisition in less than two years. With this new site, our portfolio will span just shy of 30,000 acres across eight counties in three countries – England, Scotland and Wales – ranging from 304 acres in Ceredigion to over 12,000 acres in Perthshire, with purchase prices ranging from just £90,000 to over £20m. We’ve had the privilege of working with some wonderful sellers, talented agents and skilled lawyers, and each transaction has presented its own particular (and occasionally unusual) challenges. Our brilliant Operations Team has successfully overcome many of these, but some are still being actively managed as we embrace our role as the new custodians of these incredible landscapes.
Reflecting on our progress and learnings across these deals, in this article, we describe what has become the Oxygen Conservation ‘model’ for buying land at a revolutionary pace to “Scale Conservation”.
1 – We do our homework. Before our boots hit the ground for a viewing – and they always do on every site we buy; this is a fundamental part of our process as we’ve seen some amazing sites on paper which don’t live up to expectations in person – we will have investigated and valued the opportunity by screening it against a huge number of data sets and individual GIS layers. Since we started Oxygen Conservation, we have screened hundreds of sites (we estimate in the region of half a million acres) and – thanks to our incredible data modelling team – we can do this exceptionally quickly. This means we have an accurate understanding of the site’s key attributes and unique value to us before setting eyes on it and will only conduct a site visit if we have a genuine intention of acquiring it.
2 – We are not afraid of complexity. Buying land in rural areas can be incredibly difficult – many estates have not changed hands for years and so the legal title may be unregistered, meaning we need to untangle a web of historic title deeds to understand what we are taking on. Our perspective is that this can be a feature of the site, rather than an insurmountable concern, and investing time and resources to unlock a complicated, yet environmentally significant, estate is something we are especially well geared up to achieve and we have found to be incredibly awarding. We also intend to own our conservation sites for multiple generations so we are very happy to respect things that are uniquely important to the current owners, even where this means the deal structure is unconventional or we are asked to approach certain matters with extra sensitivity or care.
3 – We are decisive. We are urgently working to Scale Conservation and therefore make quick decisions about whether we wish to acquire a site. We can screen an opportunity within minutes and will almost certainly make a decision on an estate on our first visit. On one occasion, a site had such special conservation value that we shook hands on a deal with the seller over a cup of tea in his kitchen, at the end of a beautiful afternoon exploring his unique property!
4 – We are honest. We will explain our observations and concerns openly and without delay and try to work with sellers and agents to find solutions. Our approach has always been to strike and stick to a deal which both parties are equally delighted with and we aim to build strong relationships with our sellers. In one instance, whilst we did not ultimately proceed with the acquisition, we developed such a positive rapport based on our mutual love for nature that the seller in question decided to take their estate off the market and start to implement significant environmental restoration projects themselves. If this is not the case, we have found that problems inevitably arise in the course of the transaction which can be very difficult to resolve. Of course, honesty works both ways and we will reconsider the site’s value to us or even walk away if we haven’t been given full disclosure of material issues upfront, regardless of the associated abortive costs. It may be a great site, but others will come along, and we won’t buy a site if we can’t maintain open and positive relationships with everyone involved – it’s not the way we want to do business.
5 – We work at pace and meet our commitments. We know that some deals must be done quickly and keeping up momentum is crucial – the largest site we have acquired was closed in just four weeks. However, complex transactions can take time and our rule is now to commit only to deliver against a specified timeline if we are confident we can do so. We’ve learnt that agreeing to a “best endeavours” approach in the pursuit of unrealistic timelines leads to unnecessary and avoidable angst and tension later – fortunately positively resolved in that particular instance but not a situation we wish to put ourselves in again.
6 – We expect sellers to be ready to sell. Having a fully populated, well-ordered data room and draft contract pack proactively prepared by engaged agents and lawyers helps get the legal process up and running quickly and gives us confidence that the seller is committed to proceed. The more work that can be done before our offer is accepted, the smoother, quicker and cheaper the transaction is likely to be and it is frustrating when we have to deal with issues that could (and often should) have been dealt with or tidied up before the site came to market. The vast majority of sellers want to go at an incredible pace but aren’t often actually ready to do so – in our view, this is an area where professional advisers can do more to help their clients and make everyone’s lives a bit easier!
7 – We invest heavily in every transaction. We’re fortunate to work with an excellent team of external specialists, advisers and partners (not least Ross Simpson and his team at Burges Salmon) who go above and beyond to help us Scale Conservation. We resource each deal suitably – both from a funding and personnel perspective – to ensure that our due diligence (including a wide range of traditional and environmental surveys) is thorough and we meet agreed deadlines. Our approach is to take the keys confident that we know our priorities and challenges for the first twelve months of ownership.
8 – We focus on what’s important. When we embark on a transaction, we are very clear about the reasons why we wish to acquire the site and the risks it brings that we need to mitigate, manage or resolve. We endeavour not to battle over details which do not matter and will never let ego or emotion derail the deal. ‘Bankability’ is critical for us as we strive to demonstrate the benefits of deploying private capital into nature and scale the entire natural capital economy, and this approach was a key feature of our recent landmark conservation-focused debt facility with Triodos Bank UK.
9 – We welcome the opportunity to engage early with key stakeholders. We appreciate this is not always possible for a range of reasons. However we have found that being able to talk to tenants, employees and community members about our intentions as soon as possible leads to positive outcomes for all involved. Where this has not been permitted, our experience has been that the unknown (the intentions of a mystery buyer) or the unforeseen (that the first the key stakeholders hear of our purchase is after we have exchanged contracts) can result in concern, upset and resistance. Indeed, we have not pursued some wonderful sites where immediate engagement with the local community – which we deemed vital to a successful transition – was not supported.
10 – We don’t always get it right. We’re hugely proud of the relationships we’ve built with so many sellers over the past two years. We’ve created a long-term innovative farming partnership with one family, bought multiple properties from another family and continue to correspond regularly with others. We do, however, realise that our approach will not suit every seller and the normal ebbs and flows of a transaction can result in (unintended) stress and frustration, most commonly because sellers are quite understandably emotionally invested in the site they are parting with. Please tell us if this is the case – we always welcome direct conversations and will listen and adapt to your concerns as best as we can.
We’ve had so much fun buying land in the past two years. The excitement of seeing a special new site, envisioning its potential for positive environmental and social impact and then bringing it into our ownership to give us the opportunity to deliver that change energises us to keep Scaling Conservation as quickly as possible. Our next ten acquisitions will no doubt bring new experiences and challenges and our model will inevitably evolve further, but that is all part of the adventure as we seek to deliver positive impact for people and the environment.
Proudly written in partnership with our wonderful Head of Legal George Pawley