Place AGM 2013: Matt Crompton
•Download as PPTX, PDF•
2 likes•747 views
Matt Crompton, joint managing director, Muse Developments - national developer's perspective on the market
More Related Content
What's hot
What's hot (20)
Viewers also liked
Viewers also liked (10)
Similar to Place AGM 2013: Matt Crompton
Similar to Place AGM 2013: Matt Crompton (20)
More from Place North West
More from Place North West (20)
Recently uploaded
Recently uploaded (20)
Place AGM 2013: Matt Crompton
- 1. Matt Crompton Joint Managing Director Muse Developments A national developer's perspective on the market Place AGM Thursday, 11 April 2013
- 2. The North West in context Muse’s experience of the North-South divide: • ‘North-Greater London divide’ • Commercial: pre-lets a prerequisite • Apartments (South): Town housing (North)
- 3. The Muse perspective • Strong parent • Track record • Persistence and doggedness • Embracing new funding streams • £86 million construction work on site at start of the year • £190 million construction work on site now (including 530,000 sq ft commercial and 870 residential units)
- 4. Muse in the North West St Paul’s Square, Liverpool • 109,000 sq. ft. • Best in Class • BREEAM Excellent • Significant occupier interest • Slow take-up • Rents v Inducements
- 5. Muse in the North West Talbot 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. Muse in the North West Smithfield, 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. Muse in the North West New Bailey & Chapel Street, Salford • Largest ever planning application • CPO confirmed • Land assembly well advanced
- 9. Muse in the North West New Bailey & Chapel Street, Salford • On site with first phase residential (houses and apartments) • Hotel, MSCP and offices to follow
- 10. Muse in the North West Grand 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 public realm will be pre-let driven
- 11. Muse in the North West Chester Central • 500,000 sq.ft. offices and residential • A new Business Quarter scheme • Planning permission secured March 2013 for first phase offices New Victoria, Manchester • 500,000 sq ft of commercial office space • Active ground floor uses
- 12. Muse in the North West Bridge Street Quarter, Warrington • Market Hall • Cinema, bars and restaurants • Council Office Building • New Public Square • Further Phases of retail, offices & hotel
- 13. 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.
- 14. Challenges and Lessons Learned • Occupiers are key (excl. residential) • Lease terms are critical • Firmly focused investor criteria • Emerging markets
- 15. 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?)
- 16. Viability in a challenging market How do schemes stack up? • Pre-let and/or forward funded
- 17. Viability in a challenging market How do schemes stack up? • Pre-let and/or forward funded • Council-anchored
- 18. Viability in a challenging market How do schemes stack up? • Pre-let and/or forward funded • Council-anchored • Speculate selectively (with public subsidy)
- 19. 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
- 20. The Muse property prognosis • Time to prepare for the upturn • Choose your partner carefully • Target opportunities using crosshairs • The North West in context (again)
- 21. Matt Crompton Managing Director Muse Developments A national developer's perspective on the market Place AGM Thursday, 11 April 2013
Editor's Notes
- PUTTING THE NW INTO CONTEXT AND, ADMITTEDLY, GENERALISING A LITTLEIT’S NO LONGER A NORTH;SOUTH DIVIDEIT’S GREATER LONDON AND THE REST OF THE COUNTRYOUTSIDE THE CITY NEW DEVELOPMENT NEEDS EITHER PRE-LETS OR PUBLIC SUBSIDYTHE OTHER COMPARISON I WOULD DRAW FROMOUR RESIDENTIAL EXPERIENCE, THERE IS A NORTH/SOUTH DIVIDE OF SORTS:BY END OF 2013 MUSE WILL BE ON SITE WITH 1000 RESI UNITS: 275 IN THE NORTH; 75% OF WHICH ARE TOWNHOUSES: WHEREAS IN THE SOUTH 100% , I.E.725, ARE APARTMENTSFURTHERMORE THE ONLY SCHEME THAT DOESN’T HAVE PUBLIC SUBSIDY IS IN GLASGOW
- HOW DOES MUSE SEE THINGS? TOUGH TIMES ALL ROUND I GUESSWE’VE SEEN CASUALTIES, ZOMBIES, SURVIVORS & THRIVERSTHANKFULLY MUSE CONTINUES TO THRIVE HELPED BY:THE MORGAN SINDALL GROUP BALANCE SHEET AND IT’S CONTINUED COMMITMENT TO REGENERATIONA 30 YEAR TRACK RECORD PROVIDING CONFIDENCE TO LANDOWNERS AND OCCUPIERS ALIKEHOWEVER EVERYTHING’S HARDER, TAKES LONGER, IS MORE MARGINAL AND LESS FUN BUT WE NEVER GIVE UP. TENACITY AND DRIVE ARE KEYTHERE IS FUNDING OUT THERE BUT NOT AS WE’VE KNOWN IT.‘TRADITIONAL’ FUNDING IS NOT COMING BACK ANYTIME SOON!SO WE’VE EMBRACED WHAT’S OUT THERE AND AT THE START OF THE YEAR……[READ BULLETS]
- A QUICK REVIEW OF WHAT WE’RE UP TO IN THE NORTHWESTST PAUL’S SQUARE100% SPECULATIVE DEVELOPMENT VIA ENGLISH CITES FUNDSIGNIFICANT GAP FUNDING SECUREDDESPITE IT’S BEST IN CLASS STATUS; AUSTERITY, LACK OF OCCUPIER CONFIDENCE AND TENANTS STAYING PUT BY RE-GEARING LEASES HAS SLOWED TAKE UPFRUSTRATINGLY, ACTIVE ENQUIRY LIST COULD FILL REMAINING SPACE TWICE OVER BUT FOOTLOOSE ENQUIRIES MOVE AT A GLACIAL PACETHE GOOD NEWS IS THAT RENTS ARE HOLDING UP
- THIS IS A PARTNERSHIP WITH BLACKPOOL BOROUGH COUNCIL£25M OF PROMISED GRANT RECINDED IN THE COMPREHENSIVE SPENDING REVIEWHOWEVER STRONG RETAIL INTEREST AND COMPETITIVE TENDERS BRIDGED THE GAPPHASE 1 (SHOWN ON THESE IMAGES) IS £71M4 CONTRACTORS ON SITE WITH PHASE 1 WE HAVE EVEN CREATED A FINANCIAL SURPLUS WHICH SITS IN TRUST ACCOUNT AND IS NOW BEING USED TO HELP WITH PHASE 2
- A PARTNERSHIP WITH MANCHESTER CITY COUNCILIT’S OUR ONLY APARTMENT SCHEME OUTSIDE THE SOUTHYOU MIGHT SAY IT’S TESTIMONY TO MANCHESTER’S APPEAL AND THE QUALITY OF OUR PREVIOUS FIVE PHASESWE’VE GOT £6.5M OF GBB EQUITY AND GAP FUNDINGIT’S TOTALLY SPECULATIVE AND STARTED ON SITE LAST MONTHCOMPLETION SEPTEMBER 2014 AND WE ALREADY HAVE ENQUIRIESMUSE AND MCC HAS REDIRECTED SOME PROCEEDS TO SECURE THE FUTURE OF AN ADJACENT LISTED BUILDING
- NEW BAILEY AND CHAPEL STREETA DEVELOPMENT AGREEMENT WITH SALFORD CITY COUNCILLAND BETWEEN SPINNINGFIELDS AND CHAPEL STREETOUR BIGGEST SCHEME YET (VIA ECF)SALFORD’S LARGEST PLANNING CONSENT EVERCPO CONFIRMED LAST YEAR. FIRST VESTING HAS TAKEN PLACE6 YEARS IN THE MAKING2M SQ FT COMMERCIAL850 RESIDENTAILPLUS ANCILLIARY USES
- A LARGER SCALE MASTERPLAN SHOWS:SPINNINGFIELDS – BOTTOM RIGHTCHAPEL STREETSTATIONOFFICES – OPPOSITE SPINNINGFIELDSRESIDENTIAL – ALONG CHAPEL ST AND OPPOSITE GRANADA
- PHASE 1100 HOMES & APARTMENTS£6.8M FUNDING (40% OF THE COST) FROM GBB AND GROWING PLACESTHE LATTER VIA THE GM FUNDPLANNING SUBMITTED TODAY FOR A 143 BED HOTELACTIVE DISCUSSIONS UNDERWAY IN CONNECTION WITH A 600 SPACE MSCP
- WE HAVE A DEVELOPMENT AGT WITH SOCKPORT MBC370,000 SQ FT OFFICES, HOTEL AND MSCP ADJACENT TO THE STATIONWE WON IT LAST YEARTHE FIRST PHASE IS A 1000 SPACE PRE-LET AND FORWARD FUNDED MSCP ON SITEONCE COMPLETED THIS WILL RELEASE LAND FOR OFFICE DEVELOPMENT + HOTEL DEVELOPMENTAS MENTIONED AT THE START PHASE 2 WILL REQUIRE EITHER A PRE-LET OR PUBLIC SUBSIDY
- FINALLY, 2 OTHER PROJECTSMUSCH OF MUSE PORTFOLIO LINKED TO PUBLIC TRANSPORT NODES, IT’S THE FUTURECHESTER: DETAILED PLANNING CONSENT FOR CHESTER LAST MONTHJESSICCA, ERDF AND COUNCIL FUNDING AND ASSISTANCEMANCHESTER VICTORIA: HYBRID PLANNING APPLICATION BEING PREPAREDDEVELOPMENT START WILL FOLLOW THE STATION REFURBISHMENT
- FINALLY, 2 OTHER PROJECTSMUSCH OF MUSE PORTFOLIO LINKED TO PUBLIC TRANSPORT NODES, IT’S THE FUTURECHESTER: DETAILED PLANNING CONSENT FOR CHESTER LAST MONTHJESSICCA, ERDF AND COUNCIL FUNDING AND ASSISTANCEMANCHESTER VICTORIA: HYBRID PLANNING APPLICATION BEING PREPAREDDEVELOPMENT START WILL FOLLOW THE STATION REFURBISHMENT
- PAUL ASKED ME TO SHARE SOME LESSONS FORM THE FIRST SIX YEARS OF THIS RECESSION, SO HERE GOES….THERE’S LOTS OF FUNDING OUT THERE, BUT IT IS PREDOMINANTLY DEBT AND NOT GAPTHEREFORE SCEHMES NEED TO BE VIABLE (OR AT WORST MARGINAL)WHY DEBT, NOT GAP? THE COUNTRY’S BROKE AND PERHAPS THE COALITION IS HOPING THAT THE MARKET WILL BE BACK BEFORE THIS RUNS OUTEACH FUNDING STREAM IS BESPOKE WHICH MAKES NEGOTIATIONS A NOVELTY EVERY TIME. FRUSTRATING!ARE THESE PRE-ELECTION VOTE WINNERS? NOT SURE. BUT LET’S FACE IT, THEY ARE REAL AND AVAILABLE AND THERE’S NOT MUCH ELSE OUT THERE..
- WHAT ELSE?OTHER THAN RESIDENTIAL, OCCUPIERS WILL FUEL DEVELOPMENTTHEY WILL START TO EMERGE WHEN CONFIDENCE RETURNS AND THERE IS A SUPPLY & DEMAND IMBALANCE. HOWEVER, WHILST IT’S AN OCCUPIER MARKET, LEASES STILL HAVE TO BE ROBUST TO ENSURE THAT FUNDERS & INVESTORS WILL COMMITINVESTORS ARE HIGHLY FOCUSSED RIGHT NOW. CHECK OUT THE ATTRACTIVENESS OF YOUR PRODUCT, SECTOR, TENANT AND LEASE RECESSION HAS SPAWNED NEW MARKETS SUCH AS ANNUITY INVESTORS, PRIVATE SECTOR RENTAL INVESTORS, INSTITUTIONS ACTING AS ‘SHADOW BANKS’ AND PENSION FUNDS BUYING HOUSEBUILDERS (LIKE CALA HOMES),
- HOW HAVE PUBLIC PRIVATE PARTNERSHIPS COPED?SOME BETTER THAN OTHERS. FAILURES AND COSTLY RENEGOTIATIONS HAVE OCCURRED ACROSS THE NWTHESE ARE LONG TERM RELATIONSHIPSTHEY NEED AN EXPERIENCED INDIVIDUAL TO LEAD THE WAYOJEU CAN ENGENDER INFLEXIBILITYFLEXIBILITY IS KEY IF THESE RELATIONSHIPS ARE TO SURVIVE CHANGES IN GOVERNMENT, OCCUPIER SENTIMENT AND MARKET CYCLESFIXED MILESTONES AND PENAL REMEDIES DON’T WORKTHE PUBLIC SECTOR IS NOW VERY STRETCHED. SOME COPE WITH REDUCED BUDGETS AND HEADCOUNTS BETTER THAN OTHERSNOW IS THE TIME FOR AUTHORITIES TO BE PREPARING FOR THE UPTURN YET WE’RE ONLY CHASING ONE, NOT SURE WHY?
- WHAT DEVELOPMENTS WORK?PRE-LETS LIKE OUR KPMG SCHEME IN LEEDSPRE-SALES SUCH AS SAINSBURYS IN BLACKPOOL
- COUNCILS ACTING AS CATALYSTS FOR REGENERATIO.THESE ARE OUR RECENTLY COMPLETED EARLY PHASES AT DONCASTER AND WAKEFIELD
- SECULATIVE RESIDENTIAL IN HIGH QUALITY, WELL RESEARCHED MARKETSAND THAT’S ABOUT IT!
- FINALLY, HOW DOES MUSE SEE THE NEAR FUTURE?CONFIDENCE WILL FOLLOW GROWTH (1Q GDP FIGURES)OFFICE AGENTS FORUM REPORT GOOD TAKE UP FOR MCRRESIDENTIAL = GOVT’S PROPERTY FOCUS. GETS VOTESCORPORATES (EG KPMG) WILL START THE FLIGHT TO QUALITY. IT HAPPENED LAST TIME AT BARBIROLLILONDON BECOMING OVERHEATED LEAVING INVESTORS LOOKING FOR BETTER RETURNS ELSEWHERETRADITIONAL LENDING WON’T GET EASIER IN THE SHORT-TERMLESS TIGHTLY REGULATED INSTITUTIONS WILL FILL SOME OF THE GAP LEFT BY THE BANKS18 MONTHS OF FUEL FOR THE ECONOMY, THEN MORE AUSTERITY POST-ELECTION
- DON’T LEAVE IT TOO LATE TO PREPARE FOR THE UPTURNLANDOWNERS: THOUROUGHLY RESEARCH YOUR DEVELOPER, LOOK FOR TENACITY, TRACK-RECORD, BALANCE SHEETDEVELOPERS, OCCUPIERS AND INVESTORS: FOCUS ON THE BEST. AT THE END OF THE DAY IT’S ALL ABOUT LOCATION, LOCATION, LOCATIONWHEN THE MARKET DOES RETURN I BELIEVE THAT THE NORTH WEST IS POISED TO BE ONE OF THE FIRST OUT OF THE BLOCKSTHANKS YOU