Regeneration Investment Organisation UKTI

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Regeneration Investment Organisation UKTI

• Government Support to Major Regeneration Projects
• www.ukti-regeneration.com

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Sir Michael Bear

• Chair, RIO UK Special Envoy for Sustainable
  Urbanisation - China

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UK 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).

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UK 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

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UKTI Who we are
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• 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

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Why Invest in Regeneration in the UK?
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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
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Government Unlocking Growth
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• 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

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Decentralising 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

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Growing Demand
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• 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

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Nahid Majid OBE

• Chief Operating Officer RIO

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RIO Principles
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• 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
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RIO Advisory Board
Chaired By Sir Michael Bear
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Delivery 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
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Project Selection Criteria PID Project
Initiation Document
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• 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

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What we can offer Project Promoters?
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• 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

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Investor Portfolio and Asks
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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

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Investor 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).

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What we can offer Investors?
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• 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

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The 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
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Our 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

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www.ukti.gov.uk/RIO
A One-Stop-Shop for Regeneration Projects in the
UK