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An Introduction
to
Property Development

Chair

Tim Garnham
Group Development Director
Minerva

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
Partner: Commercial Division
Cluttons

Dominic Reilly
Director
Kingfisher Property Finance

Philip Walker
Director – Valuation
CB Richard Ellis

David Woods
Development Consultant
Faithful & Gould

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

 

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
  • Planning applications and appeals
  • Planning gain, planning tariffs and section 106 agreements
  • Affordable housing requirements
  • Uses and density considerations
  • Joint ventures – with whom, when and why?
  • Stamp Duty and other taxes

 

Valuation and Appraisal

  • How and when should valuations be done? By whom? With what accuracy? Based on what facts?
  • Residual valuations
  • Assembling essential data
    - rents and yields
    - construction costs
    - professional fees
    - finance charges
  • Setting the ‘right’ developer’s profit
  • Calculating the internal rate of return
  • Introducing market volatility
    - changes in interest rates
    - construction costs
    - cost of delays
    - void periods
    - changes in occupier demand and investment values
  • Sensitivity analyses

 

The Development Team – Who are they? What do they do?

  • The key players in a construction team – Architects, Quantity Surveyors, M and E Consultants, Planning Consultants, Estate Agents, Lawyers, Accountants
  • Trusting your team to deliver (don’t do it)
  • Terms of engagement – levels of remuneration – contractual responsibilities – letters of engagement
  • Preparing a development brief
  • Repeat failings of the industry and how to avoid them
  • An insider’s view of the industry and what to expect
  • Pointers to resolving the problems

 

Financing Development

  • Sources of finance
  • Structuring the financing: loans, equity and all points in-between
  • Who to approach, how to approach
  • The principal sources of finance
  • 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

 

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 the profits
  • How to minimise the risks

 

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 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

 

Understanding PFI

  • Types of schemes
  • The process
  • The players
  • Who earns what and how?
  • Who takes the risk and who reaps the profit?