Title: Regeneration Investment Organisation UKTI
1Regeneration Investment Organisation UKTI
- Government Support to Major Regeneration Projects
- www.ukti-regeneration.com
2Sir Michael Bear
- Chair, RIO UK Special Envoy for Sustainable
Urbanisation - China
3UK Government Mandate for RIO
- ..A new one-stop-shop has been set up (RIO) to
help international investors identify and fund
regeneration opportunities in the UK. - These projects wont just mean new jobs in London
or the South East - but right across the whole
country - The Prime Minister at the Lord Mayors Banquet
- (11th November 2013).
4UK Government Mandate
- We have a really strong supply of regeneration
projects in the UK - over 100 billion in
capital value. But currently the offer is
fragmented with delays and its difficult for
investors to navigate. The Regeneration
Investment Organisation provides a great
opportunity to announce a radical new approach to
helping boost investment into the UK.
- RIO acts as the honest broker and provides a
fantastic way of helping investors find and
invest into a credible range of UK wide pipeline
of regeneration opportunities. It does this by
having a dedicated regional team and development
experts, set project criteria in determining an
investible project, and by working with UK
partners through a high level advisory board. It
will therefore build on the success of the
investment secured at Battersea Power Station, by
creating an easier point of entry for investors.
By creating stronger links with local and
national partners, RIO will help to remove some
of the barriers faced by partners to project
delivery, which will enable sustainable jobs and
growth across the regions within the UK. - Sir Michael Bear, RIO Chairman
5UKTI Who we are
4
- UK Trade and Invest Strategic Relations and
Investment Team - High level relationships with the largest
institutional investors globally - Access to UK based expertise and across Whitehall
- Access to global network of UK Embassies
- Supporting key UK regeneration projects. Aim to
promote growth and jobs - Under Lord Livingston
- Team of industry Experts/FCO/BIS
6Why Invest in Regeneration in the UK?
8
Building communities and accelerating jobs and growth Pipeline could create significant jobs and positively impact on GDP Opportunities are spread across major economic zones in UK
High quality and diverse range of opportunities Over 100bn worth of projects, many of which are shovel ready 60 Strong private-sector support
A range of equity ticket sizes Equity, debt or mezzanine investment options Islamic financing structures are available
Large base of international developers with local expertise, successful track-records and strong balance sheets UK ranked in the top 3 in the European Union for dealing with construction permits1 A range of government incentives - planning/business rates
High socio-economic impact
High quality pipeline
Flexible investment options
Strong developer base government support
1. Source 2012 World Bank Ease of Doing Business
7Government Unlocking Growth
7
- Removing Barriers to Growth RIO helps to unlock
growth the how will be dealt with later - Making strategic investments to provide vital
infrastructure working with our network of UK
Embassies - Ease of Permits World Bank Ease of Doing
Business 2013 ranked UK as the second best major
economy G7 for dealing with construction permits - National Planning Framework - fast track
economic and housing appeals 88 major planning
applications are granted in 6 months
8Decentralising and Providing Incentives for
Growth
- 39 Local Enterprise Partnerships businesses
councils coming together to help determine local
priorities - 24 Enterprise Zones specific areas where a
combination of financial incentives and reduced
planning restrictions apply - City Deals these cities will negotiate deals
with government with new powers for greater
responsibility and how public money is being
spent first wave 8 Core Cities Wave 2
involves 20 Cities - Regional Growth Fund a 3.2 bn fund supports
eligible projects that are also raising private
sector investment to create economic growth
(round 6) - Local Growth Fund As part of Autumn Statement
2013 the Chancellor announced that 50m of the
Local Growth Fund will provide targeted support - Private Rented Sector a 1 bn fund to support
development of private rented homes
9Growing Demand
7
- Strong investor confidence in the UK and growing
demand for UK projects - 1.13 Trillion firepower for the UK regeneration
- Move away from trophy London assets to greater
returns elsewhere - Recent successes
- London
- 1bn in Royal Albert Docks - ABP China
- 840m in 1 Nine Elms - Wanda (90m purchase)
- 8.4bn Battersea PowerStation SP Setia (400m
purchase) - Outside London
- 700m for residential development in Manchester
Liverpool, Solihul and London
10Nahid Majid OBE
- Chief Operating Officer RIO
11RIO Principles
11
- Regeneration jobs and growth in the UK
- Credible offer assessed by industry criteria
our PID Project Initiation Document - Transparency through our Advisory Board acting as
the Honest Broker for industry and investors
RIO approved projects are assessed on project
value, job creation and regional impact and
planning status A Shovel ready with planning B
Early stage planning C Concepts
12RIO Advisory Board
Chaired By Sir Michael Bear
13Delivery Model
- Strong pipeline of credible projects backed by
industry, championed by government - Supply Side
confidence through our technical assessments
Project Initiation Document PID - User-friendly online platform for promoting and
showcasing projects - Build and maintain strong relationships with
international investors understand the demand
side - Utilisation of UKTIs network of UK embassies and
270 posts globally - Intelligent matching of supply, assessed projects
though an industry technical team PIDs and a
demand audit of investor asks - Cross-Government Sounding Board and Expertise _
Quarterly reviews with the RIO Advisory Board -
Risks managed and mitigated
Reactive ? Proactive ? Risk Mitigation ? Delivery
Model ? Review Success
14Project Selection Criteria PID Project
Initiation Document
13
- Background information project, size, location
development partner - 100 million threshold 3 plus billion (50
million where substantial regional jobs will be
created) invetsment scale - Market Demand - Appraisals
- Economic likely Jobs and growth/supply change
- Key Timings. Messaging and transparency
- Land assembly and stage of planning
- Investment type JV, developer partner, passive
or active - Potential Commercial Returns
15 What we can offer Project Promoters?
20
- Identifying key sites and packaging of proposals
capacity and scale - Defining type of investment opportunity Joint
Ventures, full acquisitions, developer
partnerships - Assessment against industry and Government backed
national criteria - Inclusion on the online RIO Project Pipeline and
in the pitchbook - Reaching out internationally to raise profile
through overseas posts - Attracting/marketing inward investment match
making as the honest broker - Partnering with developers and investors
- Sharing Learning and Best Practice
- Continuous Dialogue through the UKTI team and RIO
16Investor Portfolio and Asks
17
A range of investors and a range of requirements
/ investment type / risk appetite.
- 100m / project and scale
- Clear commercial returns across a range of
diverse finance options - Relationships JV and legacy
- Skills transfer to home markets
- Strategic positioning within a sector or market
- Finance and developer partnerships
- Interest shifting out of competitive London
market - Central and Local Government support or
incentives/guarantees/messaging and transparency - Publicity
- Challenges
- Understanding and differentiating UK regions
- Reaching the preferred project scale (100m)
- Project timings - Procurement, Regulations
17Investor Asks
- Q1 Which areas of the UK Regeneration space does
the investor have an appetite for? - Greenfield Brownfield Land Projects with or
without planning permission - Q2 Which sectors does the investor have an
appetite to invest in? - Q3 What type of role does the investor seek?
- Passive to active Sole or Partnerships
Development Joint venture to full acquisition
- Q4 What is the Investors preferred project
status? - shovel ready or opportunity to shape concept
Long or short term investment. - Q5 What is the Investors preferred project
scale? - Preferred GDV (Gross Development Value) of
project, minimum GDV to be over 100M - Q6 What are the investors preferred locations?
Across all of UK - Q7 What is the Investors previous track record?
- Previous investments in the UK and Globally in
Regeneration real estate sector - Q8 What are the target returns of the Investor?
- Mandated returns the fund needs to secure from
its Capital Targets Return on Capital
(ROC)/Internal Rate of Return (IRR).
18What we can offer Investors?
19
- Understanding key markets, regulatory regimes and
investing in the UK - Help for overseas investors navigating routes to
market in UK - Raising awareness of specific opportunities
- Building relationships and legacy with all
stakeholders to understand agendas, facilitate
introductions and hold bilateral discussions - Unblock key investment obstacles in the UK with
Overseas Posts and UK Embassies
19The RIO Project Pipeline - Online Portal
- Dynamic online platform showcasing all RIO
Projects actively seeking investment - Viewing by registered users only
- Users prompted to submit enquiries to the RIO
team for further follow-up
www.ukti-regeneration.com
20Our Achievements to Date Going Forward
- Strong partner relationships with private
developers, LEPs and LAs - Project pipeline totals 100bn GDV of projects
(90 outside London) - potential 550,000 jobs. - By asset class the projects break down by 90,000
residential units, 67m ft2 of Commercial space
and 39m ft2 of industrial space. - Supply Side We have over 100 projects being
assessed PIDs - Demand Side A RIO Investor Strategy in Place
Priority Markets - Our shovel ready (those actively looking for
investment) projects currently total 38 with a
value of 30bn and 170,000 potential jobs. - There are a number of active commercial dialogues
and MOUs in place with over 10bn potential
investment into the UK - Next Steps for RIO RIO Local and Regeneration
Investment Vehicle - Working alongside our expert partners will
further enable RIO to support and unlock major
regeneration projects across the UK
21www.ukti.gov.uk/RIO
A One-Stop-Shop for Regeneration Projects in the
UK