Place AGM 2013: Matt Crompton

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Matt Crompton, joint managing director, Muse Developments - national developer's perspective on the market

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Place AGM 2013: Matt Crompton

  1. 1. Matt CromptonJoint Managing DirectorMuse DevelopmentsA national developers perspective on the marketPlace AGMThursday, 11 April 2013
  2. 2. The North West in contextMuse’s experience of the North-South divide:• ‘North-Greater London divide’• Commercial: pre-lets a prerequisite• Apartments (South): Town housing (North)
  3. 3. The Muse perspective• Strong parent• Track record• Persistence and doggedness• Embracing new funding streams• £86 million construction work on siteat start of the year• £190 million construction work onsite now (including 530,000 sq ftcommercial and 870 residential units)
  4. 4. Muse in the North WestSt Paul’s Square, Liverpool• 109,000 sq. ft.• Best in Class• BREEAM Excellent• Significant occupier interest• Slow take-up• Rents v Inducements
  5. 5. Muse in the North WestTalbot Gateway, Blackpool• Council offices 125,000 sq ft• Sainsbury’s 120,000 sq ft• Other retail 30,000 sq ft• 650 space multi-storey car park• Phase 2 hotel and station improvements• Trust Account in credit
  6. 6. Muse in the North WestSmithfield, Manchester• Phase Six• Work commenced March 2013• 77 one, two and three bed apartments• 6,000 sq ft ground floor commercial space• Proceeds will secure the Grade 2 listed‘Mackie Mayor’ building
  7. 7. Muse in the North WestNew Bailey & Chapel Street,Salford• Largest ever planning application• CPO confirmed• Land assembly well advanced
  8. 8. Muse in the North WestNew Bailey & Chapel Street,Salford• On site with first phase residential(houses and apartments)• Hotel, MSCP and offices to follow
  9. 9. Muse in the North WestGrand Central, Stockport• Phase One 1,000 space MSCP on site(pre-let and forward funded)• 60% of Council investment repaid• Completion first quarter 2014• Phase Two offices, hotel and publicrealm will be pre-let driven
  10. 10. Muse in the North WestChester Central• 500,000 sq.ft. offices and residential• A new Business Quarter scheme• Planning permission secured March2013 for first phase officesNew Victoria, Manchester• 500,000 sq ft of commercial office space• Active ground floor uses
  11. 11. Muse in the North WestBridge Street Quarter, Warrington• Market Hall• Cinema, bars and restaurants• Council Office Building• New Public Square• Further Phases of retail, offices & hotel
  12. 12. Challenges and Lessons Learned• Explore innovative funding routes(traditional models)- ERDF (2014-2020/admin. by LEPs?/£???)- JESSICAs (Evergreen & Chrysalis)- Local Infrastructure Fund (£475m)- Growing Places Fund (£100m)- Regional Growth Fund (£2.6bn)- Get Britain Building- ‘Help to Buy’• Rates, fees, conditions, clawback, outputs,sectors, deadlines, due diligence, etc.
  13. 13. Challenges and Lessons Learned• Occupiers are key (excl. residential)• Lease terms are critical• Firmly focused investor criteria• Emerging markets
  14. 14. Public/ private partnerships• Long-term relationships (10-15 years)• Committed Project Champion• OJEU straight-jacket• Flexible partnership agreements• Performance milestones and remedies• Impact of austerity measures• Opportunities drying up (Why?)
  15. 15. Viability in a challenging marketHow do schemes stack up?• Pre-let and/or forward funded
  16. 16. Viability in a challenging marketHow do schemes stack up?• Pre-let and/or forward funded• Council-anchored
  17. 17. Viability in a challenging marketHow do schemes stack up?• Pre-let and/or forward funded• Council-anchored• Speculate selectively (with public subsidy)
  18. 18. The Muse property prognosis• Confidence and liquidity are key• Supply v demand imbalances• Residential still Government’s priority• ‘Recession proof’ pre-lets will lead the way• 2nd tier cities look good value (cf London)• This is the new banking ‘norm’• ‘Shadow Banks’ will emerge• More austerity will follow pre-election fillip
  19. 19. The Muse property prognosis• Time to prepare for the upturn• Choose your partner carefully• Target opportunities using crosshairs• The North West in context (again)
  20. 20. Matt CromptonManaging DirectorMuse DevelopmentsA national developers perspective on the marketPlace AGMThursday, 11 April 2013

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