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DELIVERING SUSTAINABLE URBANISM SLIM

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Page 1: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

DELIVERING SUSTAINABLE URBANISM

SLIM

Page 2: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

2

Page 3: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

3

FOREWORD

NATURAL

CAPITAL

SOCIAL

CAPITAL

FINANCIAL

CAPITAL BU

ILT

CAPITAL

COMMUNITYC A P I T A L

Page 4: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

4

VALUING SUSTAINABLE URBANISM9.6

4

6.6

3

6.6

0

AYLESBURYU R B A N I S M

DORCHESTERU R B A N I S M

GLASGOWU R B A N I S M

7.0

7

5.9

7 7.5

1

8.0

3

6.1

9

7.9

6

5.4

1

2.2

8

2.3

7

AYLESBURYU R B A N I S M

DORCHESTERU R B A N I S M

GLASGOWU R B A N I S M

3.1

9

2.0

9 3.6

3

4.0

1

2.1

7

3.9

4

Residual Revenue per Hectare of Built Land(Value £m)

Total Market Value of Buildings per Hectareof Built Residential Land

(Value £m)

10

8

6

4

2

0

10

8

6

4

2

0

Values are based on publically

available data sources.

STANDARDURBANISM

SUSTAINABLEURBANISM

OLDURBANISM

Values are based on publically

available data sources.

STANDARDURBANISM

SUSTAINABLEURBANISM

OLDURBANISM

Page 5: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

5

THE CHALLENGE OF DELIVERING SUSTAINABLE URBANISM

9.6

4

6.6

3

6.6

0

AYLESBURYU R B A N I S M

DORCHESTERU R B A N I S M

GLASGOWU R B A N I S M

7.0

7

5.9

7 7.5

1

8.0

3

6.1

9

7.9

6

5.4

1

2.2

8

2.3

7

AYLESBURYU R B A N I S M

DORCHESTERU R B A N I S M

GLASGOWU R B A N I S M

3.1

9

2.0

9 3.6

3

4.0

1

2.1

7

3.9

4

Residual Revenue per Hectare of Built Land(Value £m)

Total Market Value of Buildings per Hectareof Built Residential Land

(Value £m)

10

8

6

4

2

0

10

8

6

4

2

0

Values are based on publically

available data sources.

STANDARDURBANISM

SUSTAINABLEURBANISM

OLDURBANISM

Values are based on publically

available data sources.

STANDARDURBANISM

SUSTAINABLEURBANISM

OLDURBANISM

Page 6: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

6

NEW APPROACHES TO RESIDENTIAL DELIVERY

Housebuilders face

tremendous uncertainty and are

unlikely to get the margins they

want, particularly on large

strategic projects. Landowners

and property investors may need to

adopt a longer profit horizon.

Page 7: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

7

Page 8: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

8

A NEW RESIDENTIAL GROWTH MODEL

Page 9: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

9

THE REQUIRED SKILLS

It will be attractive to some investors

to have receipts over 5 to 20 years backed by

real estate assets, with the potential to add value

over and above the market through active man-

agement. This could help move the UK away from

a situation where infrastructure must be funded

through taxation to a public-private partnership

that co-invests in infrastructure.

Page 10: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

10

Land Owner

ROLE

equalized basis where land is

in multiple ownerships)

MOTIVATIONS

income from property until

land is required

value uplift

cash is required

premium rewards patience

Investor

ROLE

design, land preparation and

infrastructure

MOTIVATIONS

participation removes risk

through

sustainable urbanism premium

be used to diversify portfolios

Promoter

ROLE

money to take project

through planning permission

MOTIVATIONS

-

uplift from beginning to

post-planning permission

schemes simultaneously,

mitigating risk, capitalizing

on expertise

PHASE 1

PHASE 2

PHASE 3

PHASE 4

PHASE 5

Land Investment Vehicle

Promoter

Land Promotion Vehicle

Land Owner

Relationship of Participating Interests

PLANNING AND PROM0TION PHASE

A STRATEGIC LAND INVESTMENT MODEL, OR SLIM

Investor

Upon acquiring planning permission land

is transferred into a separate investment

vehicle, and capital is introduced to fund

further scheme development including a

design code, infrastructure, and project

management.

Landowner and promoter enter into

partnership to create a master plan,

gain planning permission, and to

promote the land, supported by

investment equity looking for returns

commensurate with risk and timeframe

INFRASTRUCTURE PHASE

Ongoing Land Management Vehicle

Page 11: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market

11

CONCLUSION

RISK

RETURN

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

120

100

80

60

40

20

0

20

PROMOTERCOSTS

LAND OWNERCOSTS

INVESTORCOSTS

REVENUETO PARTNERS

PLANNING PHASE INFRASTRUCTURE PHASE

INFRASTRUCTURE COSTSPLANNINNG AND

PROMOTION COSTS

£m

Cash Flow Profile of a Typical Project

Phases 2,3,4 and 5 also see a value uplift

due to the sale od previous phase

Page 12: DELIVERING SUSTAINABLE URBANISM · URBANISM DORCHESTER URBANISM GLASGOW URBANISM 3.19 2.09 3.63 4.01 2.17 3.94 Residual Revenue per Hectare of Built Land (Value £m) Total Market