Business Development Workshop

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Business Development Workshop James
Gibson Regional Development Director Simon
Parks Regional Head of Development
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Purpose of workshop

• To consider ways in which we can deliver the
  holistic housing aspirations of the West of
  England Partnership
• Increased supply of housing private and
  affordable
• Sustainable growth
• High quality
• Efficiency
• Wider economic benefits
• What can we collectively do better to achieve
  these aspirations?
• Aim workshop feedback to WoE Partnership

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An RPs perspective

• Changes to Government and planning system
• Reduction in available HCA investment
• Limited oven ready land opportunities
• Suppressed values - viability issues
• Limited mortgage availability/difficult lender
  constraints
• Limited private finance for some RPs?
• Market conditions have forced RPs to take one
  of two routes
• Take foot off accelerator
• Think more innovatively
• Some Sovereign examples

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Joint Ventures..

• Joint Venture with Linden Homes
• 5050 investment to develop 100 homes for
  outright sale
• Establishment of LLP company
• Sovereign represented as Board Members on LLP
• Decisions made jointly to maximise return
• Loan arrangements concluded to loan to LLP
• Driver is to maximise profit
• Sovereign will reinvest its profit into more
  affordable housing

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Better use of private finance

• Utilising existing cash position commercial loan
  to be made to National Star College
• College wish to construct specialist student
  accommodation block
• Sovereign to finance development and project
  manage construction
• National Star College to lease building for 30yr
  term with options to acquire
• Monies secured by way of charge over land
• Commercial return over and above borrowing rate
• Surplus for reinvestment

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Cross subsidy models

• Mount Pleasant Farm
• Farm acquired for speculative housing development
  
• Planning submitted for 70 home development
• 23 affordable dwellings to be constructed in
  accordance with South Gloucestershire policy
• Profit from sale of speculative houses to be used
  for the development of further affordable
  dwellings
• 60 acres of farm land also generating income

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Commercial investment models

• Broad Quay, Bristol
• 71 Serviced apartments
• Let on a purely commercial basis
• Full repairing lease with Serviced Apartment
  provider
• Administration sale acquired within 4 weeks of
  offer acceptance
• Acquired to generate profit
• Profit to be used to generate additional
  affordable housing
• Potential for market rent or outright sale

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Mixed tenure investment models

• Wichelstowe Village centre
• Mixed retail, speculative and affordable
  development
• New satellite office created
• Retail units to be let on long lease basis to
  national foodstore and local businesses
• Speculative dwellings to be let on market rent
  basis
• Affordable dwellings for affordable rent
• Attractive to the developer as whole lot is sold
  off plan

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• QUESTIONS
• DISCUSSION TIME!

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Question 1 Current issues

• If youre a developer (or agent/consultant)
• What are the barriers to delivery of housing?
• Can RPs help you overcome these?
• Are you approaching your business differently
  i.e. diversifying?
• If so what are you doing?
• If youre an RP
• What are the barriers to delivery of affordable
  housing?
• What can you do to help developers?
• Are you approaching your business differently
  i.e. diversifying?
• If so what are you doing?
• If youre a Local Authority
• What can you do to assist?

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Question 2 Partnership working

• If youre a developer (or agent/consultant)
• Can you see the benefit of early involvement with
  RPs?
• As a business do you/would you/could you take
  this approach?
• What are the barriers/obstacles?
• If youre an RP
• Can you see the benefit of early involvement with
  developers?
• As a business do you/would you/could you take
  this approach?
• What are the barriers/obstacles?
• If youre a Local Authority
• Would you welcome this approach?
• What can you do to help?

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Question 3 Financial capacity/risk

• If youre a developer (or agent/consultant)
• Is there a benefit in working with/using RPs
  capacity?
• Would this help your capacity go further?
• Is this worth exploring?
• If youre an RP
• Do you have sufficient current capacity to take
  this approach?
• Will this change going forward?
• Would you have the appetite for this approach?
• If youre a Local Authority
• Can you bring anything to the table?

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Question 4 Joint Ventures

• If youre a developer (or agent/consultant)
• Can you see the benefit of JVs with RPs?
• Would you consider doing one? Are you doing any?
• What are the barriers/drawbacks for you?
• If youre an RP
• Can you see the benefit of JVs with developers?
• Would you consider doing one? Are you doing any?
• What are the barriers/drawbacks for you?
• If youre a Local Authority
• Can you bring anything to the table?

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Question 5 Wider Economic Benefits

• If youre a developer (or agent/consultant)
• Could you work with the RP to develop training
  and job opportunities for local people in the
  construction phase?
• If youre an RP
• Could you see (or develop) longer term job
  opportunities in (e.g.)
• Maintenance?
• Security?
• Small scale enterprise?
• If youre a local authority
• Could you facilitate this through
• Your own resource?
• Use of Section 106 agreements?
• WEP employment and skills team?

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Question 6 Next steps?

• Collectively
• Where do we go from here? (Housing Delivery Panel
  LEP)
• How can we work with the WoE Partnership and
  Local Authorities to agree next steps?
• How can we work with the WoE Partnership and
  Local Authorities to agree the right partners?
• Individually what can you offer to take
  opportunities forward?
• How is this going to be done? (realistic
  deliverable)

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Thank you