• Like
  • Save
Regeneration   nhf - manchester 23-01_14
Upcoming SlideShare
Loading in...5
×
 

Regeneration nhf - manchester 23-01_14

on

  • 442 views

<prepay>,<open>, <rental>, <capital>

<prepay>,<open>, <rental>, <capital>

Statistics

Views

Total Views
442
Views on SlideShare
441
Embed Views
1

Actions

Likes
0
Downloads
0
Comments
0

1 Embed 1

https://twitter.com 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Regeneration   nhf - manchester 23-01_14 Regeneration nhf - manchester 23-01_14 Presentation Transcript

    • Funding Regeneration in an Age of Austerity Back to the Future? Chris Cook Manchester 23rd January 2014
    • “21st Century problems cannot be solved with 20th Century solutions”
    • Resilience Resilience - the enduring power of a body or bodies for transformation, renewal and recovery through the flux of interactions and flow of events Resource Resilience – Natural Grid Financial Resilience – Open Capital
    • Financial Resilience – Open Capital Prepay – credit returnable in payment for value Protocol – consensual interactive 'two way' agreement
    • Prepay Tax
    • Tax Prepay Tax Prepay – credit returnable in payment of taxes Tax Return – 'stock' part of tally stick returned to Treasury Rate of Return - rate over time at which stock is returnable for cancellation eg Prepay £8 for £10 tax - £2 profit 25% pa rate of return - not fixed - depends on existence & quantity of flow
    • Rental Prepay Credits Credit returnable in payment for £1.00 of Rent 10,000 Credits sold for £8,000 give a 25% absolute return (£2k profit / £8k investment) If Rent is £10k pa Rate of Return is 25% pa If Rent is £5k pa Rate of Return is 12.5% pa If Rent is £2k pa Rate of Return is 5% pa etc etc
    • Protocol - Capital Partnership Occupiers Occupiers Rental Custodian Custodian Prepay Investors Investors 16/06/10 % Managers 8
    • A Capital Partnership is not an Organisation 16/06/10 9
    • It does not own anything, do anything, employ anyone, or contract with anyone 16/06/10 10
    • It is simply a framework agreement within which the stakeholders self organise 16/06/10 11
    • Conventional property development is a transaction model: developer as middleman Land Owner £ 16/06/10 Property Property Buyer Buyer Developer Developer £ Property Property Buyer Buyer £ 12
    • Borrow, Buy, Build and B...er Off... 16/06/10 13
    • Financed by Equity (ownership) and Debt (from credit institutions) 16/06/10 14
    • Capital Partnership offers a new approach to financing and funding 16/06/10 15
    • Financing - for short/medium term, high risk development of new assets 16/06/10 16
    • Funding - for long term, low risk use of newly complete or existing assets 16/06/10 17
    • Financing : Land held by/transferred to a Custodian Land Land 16/06/10 Custodian Custodian 18
    • Land Owners become Investors Land Land Custodian Custodian Land Value Land Owners Land Owners 16/06/10 19
    • Councils invest the value of planning permission Land Land Value Custodian Custodian of Planning permission Councils Councils 16/06/10 20
    • Contractors invest at least the profit margin Land Land Custodian Custodian Profit Margin Contractors Contractors 16/06/10 21
    • Risk-Takers provide £ to pay Contractors’ agreed costs Land Land Custodian Custodian £ Risk-Takers Risk-Takers 16/06/10 22
    • Developers invest 'Intellectual Capital' of concept and services Land Land Value Investors Investors Land-owners, Councils, Land-owners, Councils, Contractors, Risk Takers Contractors, Risk Takers 16/06/10 Custodian Custodian Value Developers Developers 23
    • Capital Partnership creates a Rental Pool Occupiers Occupiers Rental Custodian Custodian Prepay Investors Investors 16/06/10 % Managers 24
    • Rental Pools enable a simple but radical new funding option through Prepay 16/06/10 25
    • Rental Credits – returnable in payment for property occupation 16/06/10 26
    • Funding - Equity Release by creating Rental Pools from portfolios of completed houses 16/06/10 27
    • Existing owner becomes the Custodian Houses Custodian Custodian
    • Affordable index-linked rental is set Occupiers Rental Houses Custodian Custodian
    • Proportional Share allocated to Manager Occupiers Rental Houses Custodian Custodian % Manager
    • Balance of Rentals to Investors Occupiers Rental Custodian % Investors % Managers
    • Prepay Credits returnable in payment for rentals are created and sold to investors 16/06/10 32
    • Example – Pool of 1,000 houses has affordable rents of £4m pa 16/06/10 33
    • After (say) 25% for maintenance etc £3m pa is available for funding costs 16/06/10 34
    • Debt: £3m pa will fund <£40m debt over 20 years at 5% compound interest 16/06/10 35
    • Prepay 20 Years' rent = 60m x £1.00 credits: @ 50p raises £30m: Rate of Return = 100%/20 yrs = 5%pa @ 66.6p raises £40m: RR = 50%/20yrs = 2.5%pa 25 Years' rent = 75m x £1.00 credits: @ 50p raises £37.5m: Rate of Return = 100%/25 yrs = 4%pa @ 66.6p raises £50m: RR = 50%/25yrs = 2%pa
    • Rental Credits – value proposition for Investors not dissimilar to a REIT 16/06/10 37
    • Except that, crucially, Rental Credits are returnable in payment for rent 16/06/10 38
    • Rental Credits – as rental levels rise or fall rate of return increases or falls 16/06/10 39
    • A Rental Pool will have a 'common bond' – geographic or otherwise 16/06/10 40
    • Occupiers are natural buyers and acquire rental credits by paying rent in advance 16/06/10 41
    • Occupiers who care for their property may receive 'Sweat Equity' rental credits 16/06/10 42
    • 21st Century Problem Retiring Generation -'long' of Property and 'short' of Care for themselves and their property - poor returns on deposits (loans to banks) Working Generation – burdened with bank property debt Young Generation – long of Care but short of Property
    • 21st Century Resolution Retiring Generation - exchange rental credits for care - invests directly 'Peer to Asset' in rental credits Working Generation – direct investment in rental credits replaces bank property debt Young Generation – care exchanged for rental credits
    • 21st Century problems cannot be solved with 20th century solutions.........
    • …....21st century solutions pre-date modern finance
    • Thank You 16/06/10 47