Community land partnership may 2011

1,241 views

Published on

Published in: Real Estate
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,241
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
16
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Community land partnership may 2011

  1. 1. Funding the Future Chris Cook 10 May 2011 Simply does it
  2. 2. 21 st Century problems cannot be solved with 20 th century solutions 16/06/10
  3. 3. 21 st Century Problem - Financing & Funding 16/06/10
  4. 4. Financing - development of new assets Short/medium term, high risk 16/06/10
  5. 5. Funding - use of completed assets Long term, low risk 16/06/10
  6. 6. Banks - limited and expensive financing 16/06/10
  7. 7. Treasury - massive cuts to public funding 16/06/10
  8. 8. 21 st Century Solution - Capital Partnership Custodian Investors Occupiers % % £ 16/06/10 Managers
  9. 9. Capital Partnership offers a new approach to financing and funding 16/06/10
  10. 10. Equity Shares - % age shares in revenues or production 16/06/10
  11. 11. Units - redeemable in payment for production 16/06/10
  12. 12. Community Land Partnership Custodian Investors Occupiers % % £ 16/06/10 Managers
  13. 13. Financing : Land held by/transferred to a Custodian Land Custodian 16/06/10
  14. 14. Land Owners become Investors Land Land Owners Custodian Land Value 16/06/10
  15. 15. Councils invest the value of planning permission Land Councils Custodian Value of Planning permission 16/06/10
  16. 16. Contractors invest at least the profit margin Land Contractors Custodian Profit Margin 16/06/10
  17. 17. Risk-Takers provide £ to pay Contractors’ agreed costs Land Risk-Takers Custodian £ 16/06/10
  18. 18. Developers invest 'Intellectual Capital' of concept and services Land Investors Land-owners, Councils, Contractors, Risk Takers Developers Custodian Value Value 16/06/10
  19. 19. Outcome – Co-ownership of a Rental Pool Custodian Investors Occupiers % % Rental 16/06/10 Managers
  20. 20. Rental Pools enable a simple but radical new funding option through Unitisation 16/06/10
  21. 21. Units – undated credits redeemable in payment for property occupation 16/06/10
  22. 22. Funding – we create and sell Units in Rental Pools from occupiers of completed houses 16/06/10
  23. 23. A Custodian is appointed or incorporated Custodian Houses
  24. 24. Affordable index-linked rental is set Custodian Rental Houses Occupiers
  25. 25. Proportional Share allocated to Manager Custodian % Rental Houses Occupiers Manager
  26. 26. Balance available to Investors % % Rental Custodian Investors Occupiers Managers
  27. 27. Units are sold to Investors at a discount to the rental value 16/06/10
  28. 28. The discount determines the return 16/06/10
  29. 29. Debt : £300k pa will fund <£4m debt over 20 years at 5% compound interest 16/06/10
  30. 30. Units - £300k (initially) funds £5m @ 6% £10m at 3%; £20m @ 1.5% (index-linked) 16/06/10
  31. 31. Investors effectively lend to the land – not to the owner 16/06/10
  32. 32. Occupiers may invest simply by paying rent in advance..... 16/06/10
  33. 33. ...and may receive 'Sweat Equity' Units if they maintain the property themselves 16/06/10
  34. 34. Surprise! No compound interest + no principal repayment = drastic cut in funding costs 16/06/10
  35. 35. A Community Partnership is not an Organisation 16/06/10
  36. 36. It does not own anything, do anything, employ anyone, or contract with anyone 16/06/10
  37. 37. It is simply a framework agreement within which stakeholders self organise 16/06/10
  38. 38. Example – Bruce Road, Tower Hamlets 16/06/10 10 short - life houses 4 empty
  39. 39. Development – council invests existing land and buildings 16/06/10
  40. 40. Co-operative refurbishes properties with professional oversight by CDS 16/06/10
  41. 41. A Pool of £75k pa index-linked affordable rentals is thereby created 16/06/10
  42. 42. £15k pa index-linked is allocated to maintenance & depreciation 16/06/10
  43. 43. Leaving £60k pa available for financing and funding 16/06/10
  44. 44. This would fund only £800k in 20 yr debt at 5% pa....... 16/06/10
  45. 45. .....but it will fund up to £2m of Units with a 3% index-linked return 16/06/10
  46. 46. The Co-operative members participate collectively and individually 16/06/10
  47. 47. LBTH Council may sell Units before, during or after development 16/06/10
  48. 48. Returns are commensurate with risk 16/06/10
  49. 49. But always better than selling to a debt-financed purchaser 16/06/10
  50. 50. Thank You 16/06/10

×