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Investment case

Supporting economic, technological and social change

The opportunity is huge

There were 15,763 unused brownfield sites in England at the end of 2017, with a housing capacity of over 970,000 homes. 

This includes 6,700 acres of unused brownfield land in London alone, and c.24,000 commercial buildings sitting empty – mostly for long periods of time.  Our focus is on underloved and overlooked land and buildings, which are bristling with untapped potential and character. In the right hands, they can be transformed into economically sustainable and attractive local communities. Our ability to find and deliver value from these complex sites sets us apart and gives us a competitive edge.

We are clearly aligned with central and local government priorities on mixed-use regeneration, helping the public sector to maximise the value from its land and, most importantly, to meet community needs for better places to work, live and socialise. As one of a small group appointed on the GLA’s London Development Panel, which we believe will be used to procure and brig forward up to £20 billion of development land in the next four years, we have an opportunity to support the public sector in creating the mixed-use accommodation London so urgently needs.

 

Operating in a long-term growth market

Operating in a long-term growth market

We operate in three core geographies – London City Region (within one hour’s commute from London), Manchester and Dublin – where we see the greatest growth potential. They are expected to see a sustained increase in population, above national average, and lower unemployment in the coming years, whilst also benefitting from being well advanced in our four economic growth drivers of talent, tolerance for diversity, transport and tourism.

We focus on mixed-use regeneration which is less likely to be impacted by market sentiment and where there is a recognised shortfall:

  • Current housing, offices and community spaces are unsatisfactory
  • 300,000+ new homes needed in the UK every year and an urgent priority for government and local authorities
  • Flexible living and working habits driving demand for quality mixed-use spaces as affordability and infrastructure are prioritised over postcode
  • Growing pressure on local authorities to deliver with shrinking resources

Clear competitive advantage

Clear competitive advantage

Our track record of over 25-years, planning success rate of over 90%, and trust in our delivery, give us a competitive edge:

  • Mix of PPP, trading and investment activity gives several routes to value creation
  • The PPP market has high barriers to entry – trust, reputation and quality are key
  • Strong, long-standing partnership network – including membership of GLA’s London Development Panel and TfL Property Partnerships Framework – provides privileged access to new opportunities
  • Vision to find and deliver value from complex, overlooked, underloved places, brimming with potential and character opens up opportunities for us

Delivering sustainable financial returns

Delivering sustainable financial returns

Growing pipeline >£9.5 billion GDV, with visibility for next ten years and beyond:

  • Targeting £50+ million development and trading gains per annum and 12% average post tax total returns – driven by large scale PPP projects balanced with shorter-term trading activity and underpinned by investment portfolio returns
  • NAV driven by cash returns from management driven development, trading and investment activity, not accounting revaluations
  • Long-term capital partnerships to fund multiple PPP projects provides business efficiencies

Optimal capital allocation

Optimal capital allocation

Clear dividend policy designed to redistribute surplus cash to shareholders:

  • Operational leverage:
    • PPP model and joint ventures with major capital partners (specialist platforms) enable us to grow pipeline and deliver returns with limited equity investment in any one project
    • Limits specific project risk and keeps balance sheet debt at appropriate levels
  • Balance sheet managed to minimise risks and maximise returns
  • Strong cash generation allows us to reinvest in the business, whilst aligning shareholders with our success– supplemental dividend of £38.5 million since 2015

Clear purpose

Clear purpose

We exist to unlock potential to realise positive change:

  • Creating great places that bring long-lasting positive social, economic and environmental change for communities is at our core
  • Through Worthwhile Use, we connect with communities – creating jobs, driving productivity and boosting local economies
  • People matter. Talking and listening to our partners and communities lead to greater engagement and support in planning
  • Values of imagination, intelligence and audacity are ingrained in our approach and culture

Effective senior management team

Effective senior management team

Industry-wide Board expertise brings fresh thinking and innovative approach: 

  • Experienced team with strong track record, motivated by delivering on the huge potential of a young company
  • Passion, curiosity and ambition to keep challenging in an exciting, fast-changing industry
  • Merging two businesses brings the best of analytical due diligence with creativity and entrepreneurial flair

How we measure our progress

£ 50m+

Target development and trading gains per annum

12%

Target total returns

10%

Target investment portfolio total return

40-50%

Target gearing on balance sheet

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