Chair

John Bywater, Managing Director (UK), Hammerson plc

Speakers

John Butler, UK Economist, HSBC Investment Bank

Stephen Clarke, Senior Director, Public Sector Consultancy, CB Richard Ellis Ltd

John Gidman, Chief Executive Officer, Metro International Ltd

Roger Madelin, Chief Executive, Argent Estates Ltd

Steve McGuckin, Development Director, Land Securities Group plc

Adrian Powell, Head of Development, Donaldsons LLP

Paul Shelley, Planning & Development Consultant, Paul Shelley Ltd

Malcolm Wilson, Executive Director, CB Richard Ellis Financial Ltd

Nigel Woolner, Director, Chapman Taylor LLP

Andrew Bailey, Partner, Addleshaw Goddard LLP

 

Programme

The Macro Economic Environment and Lessons from the Past
• Contrasting influences of economic forces on property development. Contrasting influences on residential, commercial, retail and industrial development
• Current economic and development trends, predicting the next five years and the evidence of current macro economic indicators

Identifying and Appraising Development Opportunities
• Site finding. How to investigate opportunities using local authority planning documents, the use of agents, use of local authority compulsory purchase powers, site assembly and the opportunities for development intensification. How to negotiate with different types of landowner
• Credibility and viability studies. What can be investigated at minimum cost; desk top studies. When to incur investigatory fees before site purchase. Identifying uncertainty and quantifying risk with uncertain knowledge
• The use of consultants in viability studies; architects, quantity surveyors and others. What service to expect, what fees to pay and when
• The preparation of a full appraisal. Where to find the necessary information. How to instruct consultants and what information to require, what to pay and when. The prediction of the return. Advantages and disadvantages of the ways to express return; % of cost or GDV, net present value, internal rate of return, cumulative cash flow. Return as a comparative measure against other investment media such as equities and gilts. The preparation of a sensitivity analysis and the calculation of risk by standard deviation

Site Acquisition
• Methodology for detailed site investigations before purchase
- title issues such as rights of way and light, restrictive covenants, access rights, the possibility of ransom strips and encroachment by third parties
- site surveys such as flooding risk, site contamination and subsoil conditions
- services accessibility, provision and capacities
- competing developments
• When and in which combination to use varying methods of acquisition
- joint ventures, options, conditional contracts, clawback, overage and development agreements
- timing of payments and appropriate combinations
- mitigating the risk of financial loss and maximising gain for the developer

Marketing
• Preparation of a marketing campaign – from pre-development to completion
• The impact of branding
• The role of the agent and the impact of research on developing the marketing strategy

Planning
• Negotiation with planning authorities. Understanding the 2004 Planning and Compulsory Purchase Act and recent changes to the planning system and their impact on development activities
• The adoption of different tactics to obtain planning consent depending on the type of scheme. Major sites for allocation will require lobbying, negotiation and an appreciation of the planning balance sheet. How to instruct planning consultants and the planning arguments to be adopted to make a case to the planning authority. How to deal with objectors and pressure groups
• The techniques of making a planning application and the techniques and tactics to be adopted on appeal. How to choose the best approach; hearing or written representations. How to appreciate and reduce the risks of appeal failure and the adoption of alternative strategies
• Specialist planning; listed buildings and the tactics to be adopted to obtain listed building consent, quantifying the relationship between listed buildings and value, the effect of conservation area status on development opportunities

Development Funding
• The distinction between corporate and project funding and factors which determine choice. The principles of debt and equity funding
• The funding choice during the development process; short, medium and long term funding
• Examples of various types of short and long term project development funding including development loans, joint venture (JV) financing and forward funding
• Practical application of development funding; which type of funding for which type of scheme and which type of developer?
• What is required to secure funding; the preparation of the business plan for the funding party
• Agreeing heads of terms, Board approvals, legal documentation; conditions precedent and due diligence
• Where is it appropriate and advisable to use interest hedging techniques?
• The differing requirements of lending sources such as banks, institutions and JV partners

Design, Development and Construction
• Selecting a suitable contractor(s) for the developer and the project. The process of selection and the criteria used to select. The way to run contractor interviews and the preparation of a tender list. When it is appropriate to negotiate a contract
• The application of various types of procurement to different types of project and the risk profiles involved with the selection. Types of contract covered will include the new BPF contracts, JCT lump sum, JCT with contractor’s design, management contracts, construction management and two stage tenders
• The relationship between contract cost, project value and profit. When is it profitable to incur additional contract cost?

Managing the Development Process
• When and who to engage as project manager, is it an internal or external appointment? What skills does the developer bring to the party and how does he match those skills to the project manager’s skills?
• If outside consultants are used, what service should be sought, project coordination or project management? What is actually offered by consultants and what risks remain with the client?
• The best methods for appointing architects, quantity surveyors and engineers. Standard and bespoke consultancy agreements, what they should contain and when they should be used
• The techniques of preparing and monitoring the master programme and the risk profile of various types of programme
• The role of the client and consultants in preparing the budget for the project and the incorporation of contingencies for consultants and client
• The best method of extracting the project brief from various parties (client, tenants and other participants) and methods of monitoring the brief as it develops
• The use of pre and post contract procedures and methods of preparation using examples
• Methods of monitoring the design and construction process. Ways to manage the design team to ensure that the project is exposed to the client’s gaze. What reports can be expected from the consultants and how these can be used to monitor time, cost and performance?
• Appropriate procedures at project completion to ensure that the issue of the final certificate, remedying of defects, and refunding can take place speedily

Letting and Disposal
• How to select and instruct agents and monitoring their activities – appointing the letting agents and the service which can be expected
• The agreement of a letting strategy with agents and other parties
• Opportunity for pre-letting
• The preparation of a draft lease and procedures for alterations and approvals
• Due diligence and related matters

Public Sector Development/Involvement
• Appraising the importance of government policy, Regional Development Agencies, English Partnerships and other Quangos to development and how to take advantage of the opportunities available
• How to win local authority owned town centre sites in competition with other developers. How to provide options to the landowner and how to judge the attractiveness of a monetary offer to the landowner
• Negotiating the local authority ground lease. How the local authority landowner fits into the development scenario with developer and fund. How rental shares and premiums are calculated. Developer’s covenants in the ground lease and development agreement and how developer’s risks can be quantified
• Opportunities for private sector involvement with the Private Finance Initiative (PFI)

Common Mistakes and Errors – Developer Panel Session
• How to avoid being a late cycle developer. How to time a development project to coincide with favourable economic conditions. The major project and its inherent uncertainty in terms of the economic climate
• How to avoid site problems such as boundary disputes, adverse possession, subsoil problems, logistical errors with materials, access problems and adverse covenants
• The avoidance of common errors with the financial appraisal; over optimistic rents and yields, uncertain costs, the unknown impact of third party requirements, inadequate hedging instruments, unrealistic programme assumptions, uncertain long term funding arrangements. Appreciating the risk reward trade off in finance and funding
• How to ensure that the consultants are presenting a realistic picture in terms of design, programme and specification
• How to identify the failing consultant and what can be expected if a consultant needs to be replaced
• How to avoid the pre let tenant that does not complete a lease. How to ensure that major pre-lets remain committed to the project
• How to ensure that clear financial information is available at all times for the developer. How to elicit meaningful information from the consultants where changes to the project are required for letting purposes
• How to predict and deal with potential contractual claims and how to monitor the activities of the architect as a supervising officer who does not, in reality, supervise the contractor
• How to minimise the effect of unlet buildings upon completion, increased contractual costs, extended programmes and specification failures. When is it advisable to take legal action?