Property Development

Chair
Tim Garnham
Group Development Director
Minerva plc

Speakers
Anthony Bowhill
Consultant to CgMs Planning Consultants

Nigel Dubben
Senior Lecturer, School of Surveying
Kingston University
Joint Author
‘Property Portfolio Management:
An introduction’

Alan Elias
Partner, Construction Group
Clifford Chance

John Gidman
Chief Executive
Capital Project Consultancy Limited

Ian Noble
Ian Noble Associates

Dominic Reilly
Director
Kingfisher Property Finance

Philip Walker
Director – Valuation
CB Richard Ellis

Nigel Woolner
Main Board Director
Chapman Taylor

Getting Started – The Fundamentals
• What the developer’s role is
• What cannot be delegated
• Knowing a little about a lot of issues
• The cost of using experts
• Is property development a manufacturing process?
• Understanding the influences that must be juggled: occupier demand, site availability, planning constraints, finance, professional fees and construction costs, legal rights and obligations
• The private sector developer – profit – the prime objective
• The not-for-profit developer – selling the objective
• Making decisions, the developer’s principal responsibility

Town Planning – The Key to Value Uplift but the Frustration of Most Developers
• The concept of development
• When is planning permission required?
• The importance of development plans
• Planning applications and appeals
• Planning gain, planning tariffs and section 106 agreements
• Affordable housing requirements
• Planning officers and councillors; what they do and don’t do and how to interact with them
• Government priorities – sustainable communities, mixed-uses and good design

Funding and Acquiring Sites
• How sites are found. Where and how to look
• Investigations before purchase
• Outright acquisition, conditional contracts and options
• Warranties and undertakings
• Building leases
• How much to pay – residual valuations and comparable evidence
• Local, district and regional plans. Monitoring changes to plans. What officers do and what council committee members do
• The roles of introducing agents and their charges
• Contamination risks
• Land zoned for planning and white land
• Uses and density considerations
• Joint ventures – with whom, when and why?
• Stamp duty and other taxes

The Development Team – Who are they? What do they do? How do you engage them?
• The key players in a construction team include: Agents, Project Managers, Lawyers, Architects, Surveyors, Engineers, Builders, Subcontractors
• Trusting your team to deliver (don’t do it)
• Stakeholder management
• People do business with people, not companies
• Repeat failings of the industry and how to avoid them
• An insider’s view of the industry and told the way it really is

Valuation
• Nature of valuation and why it is fundamental to property development – why, how and when should valuations be done? By whom?
• Concept of residual valuation
• Assembling and verifying essential data
- rents and yields
- construction costs
- professional fees
- finance charges
• Checks and balances
- setting the ‘right’ developer’s profit
- scenario testing and sensitivity analysis
- DCF
• Market volatility and its effect (case study)
- changes in interest rates
- construction costs
- cost of delays
- void periods
- changes in occupier demand and investment demand

Financing Development
• The principal sources of finance
• Structuring the financing: loans, equity and all points in-between
• Who to approach, how to approach
• Common methods of funding development
• How funding is received and repaid
• Allocations of risk and reward
• Joint ventures
• Finance brokers and other intermediaries – their roles and charges

Design and Construction
• Who does what
• The pre-site plan
• Once-on-site management
• What happens after practical completion
• Alternative structures – traditional design and build, construction management, partnering, mix and match
• Cost control
• Monitoring and controlling progress
• Dispute resolution
• Defining completion
• The involvement of funders and pre-let occupiers
• Health and safety issues
• Satisfying building regulators

Letting/Sale
• Pre-letting during construction and letting on completion
• Letting: agreements for lease and leases
• Stamp Duty Land Tax and its effects on leases and rents, surveys and sale prices
• Selecting agents; agreeing fees
• Monitoring potential demand and marketing
• Selling the investment
• Refinancing to hold

The Legal Agreements
• The purpose of legal documents
• The suite of agreements and the contractual matrix
• How project insurance interacts with the legal documentation
• Dealing with development and construction risk
• Design and construct building contracts
• Key issues on pre-let agreements

So What Goes Wrong Most Often? How to Avoid the Many Pitfalls. The Art of Maximising Profits
• Most frequently made mistakes
• How to spot the dangers – how to avoid them
• How to maximise profits
• How to minimise the risks