Business Development Workshop James Gibson Regional Development Director

1. West of England Growth & Delivery Event - 13th October 2010 Business Development Workshop James Gibson Regional Development Director Simon Parks Regional Head of Development

2. 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

3. An RP’s 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 RP’s? • Market conditions have ‘forced’ RP’s to take one of two routes: • Take foot off accelerator • Think more innovatively • Some Sovereign examples:

4. Joint Ventures….. • Joint Venture with Linden Homes • 50:50 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

5. 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

6. 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

7. 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

8. 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

9. QUESTIONS & DISCUSSION TIME!

10. Question 1 – Current issues • If you’re a developer (or agent/consultant): • What are the barriers to delivery of housing? • Can RP’s help you overcome these? • Are you approaching your business differently i.e. diversifying? • If so what are you doing? • If you’re 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 you’re a Local Authority: • What can you do to assist?

11. Question 2 – Partnership working • If you’re a developer (or agent/consultant): • Can you see the benefit of early involvement with RP’s? • As a business do you/would you/could you take this approach? • What are the barriers/obstacles? • If you’re 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 you’re a Local Authority: • Would you welcome this approach? • What can you do to help?

12. Question 3 – Financial capacity/risk • If you’re a developer (or agent/consultant): • Is there a benefit in working with/using RP’s capacity? • Would this help your capacity go further? • Is this worth exploring? • If you’re 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 you’re a Local Authority: • Can you bring anything to the table?

13. Question 4 – Joint Ventures • If you’re a developer (or agent/consultant): • Can you see the benefit of JV’s with RP’s? • Would you consider doing one? Are you doing any? • What are the barriers/drawbacks for you? • If you’re an RP: • Can you see the benefit of JV’s with developers? • Would you consider doing one? Are you doing any? • What are the barriers/drawbacks for you? • If you’re a Local Authority: • Can you bring anything to the table?

14. Question 5 – Wider Economic Benefits • If you’re 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 you’re an RP: • Could you see (or develop) longer term job opportunities in (e.g.): • Maintenance? • Security? • Small scale enterprise? • If you’re a local authority: • Could you facilitate this through: • Your own resource? • Use of Section 106 agreements? • WEP employment and skills team?

15. 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)

16. Thank you