A Partnership Approach to Delivering Affordable Homes

Transcription

1 A Partnership Approach to Delivering Affordable Homes

2 Delivering Complex Sites 26th April 2017

3 Tirion... is an independent Community Benefit Society, investing in residential assets by, providing and managing affordable homes for rent and shared ownership; aims to facilitate the construction of over 2,100 homes by 2022 with over 1,500 coming from current projects; plans to establish a portfolio of homes valued at in excess of 200m by 2022; and will reinvest to subsidise marginal developments in low value areas.

4 Our Vision Our overarching mission is to: provide greater choice to those unable to or with a preference not to purchase their own home; deliver affordable homes without Social Housing Grant; regenerate brownfield, derelict and contaminated sites by establishing desirable residential neighbourhoods; stimulate economic regeneration and employment in communities by creating jobs, supporting social enterprise and providing training opportunities; and establish aspirational and sustainable communities.

5 Our Customers Tirion focuses on four groups of tenants in the low and middle income brackets; young working couples; working singles and single parents; young families, and retired singles or couples looking to downsize. Achieved through flexible tenure packages enabling customers to change their living arrangements as circumstances change.

6 Our Business Model

7 Viability challenges Finance - delivering 50% affordable homes with no grant in marginal markets is not easy The Mill - Cardiff - 6m remediation costs - 11m infrastructure costs Whiteheads Newport - 7m remediation costs Parc Eirin - Tonyrefail - Challenging rental market

8 The Mill - What we have Learnt

9 Financing Senior Debt huge appetite from institutions for long term finance at very attractive yields Remediation / infrastructure land owners should share the ground / site risk and / or adopt revenue investment strategies in place of capital receipt Development Finance remains challenging partnering with funders and contractor / developers is critical Warehouse finance junior debt the key to unlocking construction - traditional portfolio valuation methods need to recognise long term value of residential assets

10 Delivery Partnerships are crucial to delivering complex sites in challenging markets Vision is pre-requisite for innovation WG,PBS, Cadwyn & Lovell Efficient financing and appropriate allocation of risk is critical in creating value Remediation / infrastructure phases may require loans and /or guarantees from the public sector on difficult sites or in marginal areas

11 The Mill INNOVATION CAN DELIVER QUALITY

12 Delivering Through Partnership

13 Effective Partnership Working Case Study The Mill at Canton April 2017

14 Contents Facts & Figures Rationale & basis of participation The Journey Lessons learnt Key Takeaways Next steps & closing messages

15 About Us Regional Building Society established 1860 strong Welsh franchise. Purpose led with emphasis around helping people to prosper in their own homes 8.2BN Assets incorporating Retail and Commercial Divisions Retail incorporates mortgage lending for > Owner occupier > B2L > Affordable Housing Commercial includes secured lending for / to :- > Residential development funding primarily regional builders / SMEs > RSL s and related bodies commitment of c > 150m [6% market share] > Related activity with joint ventures and strategic initiatives e.g. The Mill / Welsh Housing Partnership Limited

16 Rationale and Basis of Participation Compelling linkages with brand & purpose Aligns with original formation of Society in 1860 [not just around ownership] Supports housing agenda in Wales Related markets e.g. Shared Ownership? Investment in own communities Working in harness with public sector Strategic initiatives linked to purpose Participation must be / remain in members best interests.

17 Our Journey Welsh Housing Partnership Idea PBS Board Room February 2009 The Mill 2012 onwards WHIT

18 Lessons Learnt Across 5 key themes: Political Technical Business Model Risk Appetite Internal Multiple stakeholders Planning New concept Size Draw on resource Differing priorities Clarity of roles and responsibilities Complexity Resultant differences vs traditional developer Structure of development Variances to plan Legal due diligence Stop : Start However PBS never lost belief in the initiative. Projects succeed through the will of teams of committed individuals.!

19 Crucial areas: > Alignment on vision > Partner selection > Communications / stakeholder building Key Takeaways Tenacity and will needed PBS never lost faith in design principles End result may look quite different from original concept The first scheme will be the hardest! Take the lessons and use to future proof next projects

20 A True Partnership

21 Next Steps Plenty still to do at The Mill Consolidate on current traction but:- > Stay realistic in terms of what can be done within resource > Remain focused Consider appropriate role in further sites Opportunities to demonstrate further leadership e.g. modular building? Celebrate effective and robust partnership working

22 Closing Messages Open for business Key planks must be around purpose and strategy Focus therefore will be around being:- > A selective / niche player with > An emphasis on partnership working

23 Thank you for your Peter Hughes Managing Director time D M Principality Building Society

24 Chris O Meara Chief Executive Learning from the Mill

25 Why did we get involved? S106 allocation from LA Lead partner in earlier bid for site Current PRS experience See PRS management services as strategic growth area

26 We re all property managers? Same language, different meaning Different language Different priorities Different risk appetites Learning: Anticipate the difference and clarify ambiguities early

27 Negotiation Process? Complexity Hardball Breadth of involvement Understanding the real risks Learning: Essential to use Board skills to challenge thinking

28 Resources and process? Under estimation of resources needed to respond to negotiation Information management Learning: Sort out info management system Appoint internal co-ordinator

29 Relationships Junior partner while model being developed Lack of trust made negotiation harder Learning: Early partnering work essential Keep the goal in site, play the long game

30 Making Partnerships Work Kate Rees Regional Managing Director Lovell SW & SW

31 Barriers to Partnership Working

32 Fear of the unknown

33 Different aims Different aims

34 Control

35 Decision Making

36 Lessons Learnt

37 Expectation exchange

38 Culture

39 Shared Vision

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41 Site Progress Overview

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43 Drone

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45 THANK YOU