Adept adaptation

Running a large property and historically
important landholding is a sizeable task in
anybody’s language. Jonathan Lucas talks to Bob Reynolds about the principal challenges he faces and diversification into deer farming.

Bob Reynolds is a freelance writer based in the UK and editor of Offshore Red and The OFC Report.

As landed estates go, the Lucas family holding at Warnham, West Sussex, is a relatively young enterprise. "My great-great-grandfather bought the core of the Warnham Estate in 1864, which makes us relative newcomers to the business of running estates. In this part of the country there are several that can trace their family ancestry back to the 16th century and some even to the time of William the Conqueror."

The speaker is Jonathan Lucas, the latest eldest son to inherit the estate. He faces the daily challenges to sustain and develop the business over the long term. And, according to the tradition of primogeniture, he will pass the estate developed and in good order – to his eldest son. This directive has meant that Lucas has had to become adept at adaptation and not let emotion get in the way of strategy.

Changing times
The estate is set among rolling downland to the northwest of Horsham (which is an hour's drive south of London). It has recently been sliced through by the A24 (a main road running through the counties of Surrey and West Sussex), changing the original shape of the land. Large parts of the estate are occupied by woodland (some 50% of which is oak), which is restocked with trees conducive to the clay soil. Warnham also hosts a world-class deer park with one of the foremost veterinary centres in the sector.

In addition, there are farms on the edge of the estate that are rented and managed. Warnham also has some light industrial land that Lucas converted, despite some local antagonism. "Nobody likes change, but in this case we were seeking to remove the remnants of a private gas works and redundant dairy and replace it with much more attractive domestic buildings," explains Lucas. "This is the countryside and it took eight years to secure planning permission. But my task is to leave the estate better than when I took it over, which means having a vision and going for it. I did feel resentful at the time about the opposition to this development. We were making something better and faced a challenge. With determination, we have succeeded and I am glad. That part of the estate is much more attractive as a result, and the cash capital raised has enabled me to tackle the largest remaining rebuilding projects on the estate."

Restoration and improvement are pivotal to Lucas's strategy for the management of the estate. "I love restoration projects," reveals Lucas. "I get a real sense of achievement from improving the quality of the estate. In terms of the buildings, this is both a pleasure and a necessity because our main source of income is from property rental."

Family planning
Like most family businesses, estate management is a long-term enterprise. And again, like many family business owners, at the back of Lucas' mind is the ongoing issue of inheritance tax (IHT). "It is there all the time. You must find ways to plan for it and to mitigate. I have had excellent advice from Mark Spofforth of the chartered accountancy firm Spofforths and my lawyer David Weston. They have really made a difference in helping me to design strategies that will limit my exposure."

Indeed, limiting exposure to IHT is a key element of the long-term management of the estate. "I aim to pass over the estate to my eldest son with all exposure identified and planned for. I do not want to saddle him with a large debt to the tax authority. But you need to be enthusiastic about what you are doing," reveals Lucas, pointing to the developments he has undertaken to take the property forward.

To ensure an estate's future, there needs to be a coherent plan that is sympathetic with the long-term vision of the enterprise. And it must adapt with changing trends, as Lucas learned. Indeed, when Lucas first took charge at Warnham, the bulk of the income came from farming, but the returns had been steadily diminishing – a story often repeated throughout the sector. Property, on the other had, was a drag on the estate finances; now it is the principal source of income, cashflow and investment.

This change meant that he needed to establish a clear strategy for the development, maintenance and upkeep of Warnham. "I suppose you could say that I wanted my approach to be simple and straightforward," explains Lucas. "In my father's time, there had been a series of trusts that held the estate and protected the assets. I wanted to avoid that [complexity], but as time has gone on I have needed to forego the simplicity [I wanted]. We now have a series of trusts that are based on the valuations of the assets and IHT planning."

Lucas also is a firm advocate of the idea that estate owners must be intelligent, educated and adaptable. After attending Eton and Cambridge, he trained as a land agent for Cluttons, commercial managers offering bespoke services for the appraisal, management, investment and acquisition of land and estate portfolios. Based on their expert technical knowledge, they advise landowning clients on issues such as locating and managing property, letting and selling buildings, valuing land and properties, raising finance, estate law and tax matters.

However, Lucas asserts that, despite his professional training and expertise, being a land agent is no substitute for being a landowner. "As a landowner, the responsibility for keeping the estate intact and for ensuring its long-term prosperity is wholly yours," emphasises Lucas. "In many businesses, one to five years would be a long-term vision. In landowning, the commitment and the responsibility are for life and even generations. No one knows the estate like a landowner. Every corner is intimate. Each new initiative is personal venture."

Stag party
One corner that is internationally, as well as intimately, known is the estate's park. It has been famous for the quality of its red deer for over 120 years. The antlers produced by the stags at Warnham are the leading champions throughout the UK. The stags are also bred in outstanding conditions and exported around the world, especially to New Zealand. Lucas has developed an adjoining farm into a modern stud, breeding livestock for international sale, to provide genetic improvement to other herds in other parks and farms specialising in production of trophies, velvet, venison or just majestic stags.

The project is called the Bailing Hill Deer Farm, and was started 20 years ago. In 1986, a small 72 acre (29 hectares) dairy farm adjoining the park was developed into a modern stud deer farm, principally to set up a Tuberculin Accredited herd from which to continue live exports to New Zealand. Existing buildings were adapted to house a circular pen handling system with electronic weighscale and hydraulic crush. The land was fenced to provide 66 acres (26.7 hectares) of paddocks, each connected to races direct to the handling yard. In 1993 a surgery complex was built to enable the sale of embryos from purebred Warnham donor hinds to recipient hinds in New Zealand, Canada and other markets.

The park extends to about 215 acres (87 hectares) of which some 180 acres (71 hectares) are permanent meadow pasture, the balance being woodland. Alternately each summer, half the park is shut up for hay and silage and rested from stock, to provide winter fodder and a natural break in parasite cycles. No concentrate feed is given. On this simple management basis, the park supports a winter herd of about 200 (20–25 breeding stags; 85–90 breeding hinds; 90 young stock), increasing up to 280 each summer with calves.

 The deer park is a prime example of why Warnham is thriving. Lucas has a long-term focus and, as long as he can keep IHT at bay, he will ensure the continuity of the family estate.