b1: making market rent a reality -...
TRANSCRIPT
Sponsored by
B1: Making market rent a reality
Speakers: Richard Evans, Assistant Director,
Strategic Partnerships, Thames Valley
Housing Association
Pippa Read, Head of North London Region,
Genesis Housing Association
Chair: Laura Kavanagh, Policy Officer,
National Housing Federation
MAKING MARKET RENT A REALITY
PRESENTATION TO THE NHF HOUSING DEVELOPMENT CONFERENCE
7TH JULY 2014
RICHARD EVANS
ASSISTANT DIRECTOR, STRATEGIC PARTNERSHIPS - THAMES VALLEY HOUSING
7th July 2014
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Intro
CONTENT
A BIT ABOUT THAMES VALLEY HOUSING ASSOCIATION
FIZZY LIVING
HOW TVH ADDRESSED THE KEY RISKS
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Intro
WHO IS TVH?
Registered provider
Housing business with a social purpose
Owns and manages 15,000 properties across rented, shared ownership student and keyworker sectors
Organic growth, developing it’s own stock using in-house development capabilities
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GROUP STRUCTURE
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WHY THE PRS?
Meet a clear need – bridging the gap between the owner-occupied and social housing sectors
Leverage existing expertise and in-house capabilities
Generate surpluses to invest back into affordable provision
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Intro
RESONANCE WITH OUR KEYWORKER OPERATION
> 2,000 units
Separate business unit established in 2008 – recognition that the product and the service is not core rented affordable
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Intro
FIZZY LIVING
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Intro
FIZZY LIVING
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Intro
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FIZZY SERVICE OFFER
By bringing an institutional approach, we offer our target market a considerably higher standard of management than they are accustomed to in this sector
Accessibility is key:
Our friendly and efficient on-site property managers – called “Bob” – are
accessible over the phone and face-to-face 5 days a week, not necessarily
just weekdays
Out of hours responsive service
Out of hours non-emergencies dealt with within the following working day
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KEY ASSET CRITERIA
Typical tenant characteristics: Income >£25k pa
Age 25-35
Work location Likely inner London
Typical building characteristics Good local amenities and social infrastructure
Well designed, safe and secure
Attractive to look at, with good quality construction and finishes
On-site “Bob” space
Most two bedroom apartments to have equal-sized bedrooms and two bathrooms
40 and 150 apartments per property
Some car parking allocation where possible
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KEY ASSET CRITERIA
Target gross to net rent loss of <25%
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FIZZY BUILDING TO RENT
Portfolio to date was built for owner occupation, but carefully selected for key characteristics:
Equal sized bedrooms, each with adequate storage
Versatile common areas, with sufficient space for entertaining friends
One bathroom per bedroom (not necessarily ensuite)
Outside space, likely a balcony
We are working with HTA architects to design specifically for occupation by private renters
Designs provide for optimal efficiency through innovative use of space, and are cost effective to reproduce given their modular nature
Cost efficiency translates to improved investment returns for Fizzy Living’s investors.
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BEDROOM Enough space for a big bed, a table to work at, fitted storage, and an exercise mat.
LIVING SPACE Separate dining, cooking and seating zones.
BATHROOM Every bedroom has a bathroom, for rest and recuperation
TERRACE A terrace, to catch the sun and enjoy the sound of the city on an early summer morning
LIVING ROOM Sliding walls pull back to open up the front of the flat to the city view, and to make a great flat for socialising.
Intro
HOW TVH ADDRESSED THE KEY RISKS
JV partner Professional advice and search
Governance and structure Clarity regarding roles of Board, Investment Committee, and Executive
Decisions beyond scope of business plan have to go back to the Parent Boards
Strategic vision Absolute clarity as to product, customer and location
Detailed long term business plan approved by both parent boards
Protection of social housing assets None of the finance is secured against social housing asset
The TVH group has not issued any guarantees to the commercial venture activities
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Intro
THANK YOU
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Making market rent a reality
Pippa Read
Head of North London & Herts., Portfolio lead for market rent
Communities
Genesis
The context
• Long track record
• Currently managing c. 700 market rent units
• By end of 2014 over 1000
– All coming on-stream from development pipeline
• Key corporate objective
• Creating sustainable communities - all future developments
will be mixed tenure, mixed use and include a market rent
offer
• Long-term investment in place – market rent makes sense.
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The present
1. Stratford Halo
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Stratford Halo
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Stratford Halo – the facts
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Stratford Halo – the offer
• 500m from Queen Elizabeth Park
• Multi-tenure and mixed use
• Tenure blind management
• 1, 2 & 3 bedroom apartments
• On-site housing management/facilities management
• Estate officers and cleaners
• 24hr concierge
• Gym
• Add-ons
• £1,250-£5,500 p.m.
• Diverse resident profile.
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The present
2. Temporary housing
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• Leading provider of temporary housing
• 3,700 privately leased homes under
management
• For LAs seeking settled accommodation for
those in housing need
• Lower standard properties
• Rising rents breaching LHA caps
• Flipped to market rent
• Brand and management offer implications.
Key considerations
1. Corporately
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• Brand and leakage
• Scale
• Flexible management offer – corporate,
market rent base or enhanced
• Multi-tenure or specialist management
• Lettings
• Tenancies – length, rent increases and
renewals.
Key considerations
2. On a scheme basis
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• What management offer to apply
– On-site housing
management/facilities management
– Estate officers
– Cleaners
– Concierge
– Communal space
– Gym.
• Repairs
• Add-ons.
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New Hendon Village, Barnet
Mildmay, Tower Hamlets
The future
Chelmsford ARU, Essex
The future
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Stoke Quays, Ipswich
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• Consider brand and leakage
• Further develop management offers
• Move fully to multi-tenure management
• Develop thoughts on scale
• Build up in-house lettings capacity
• Try other add-ons/build up sense of
place on defined schemes.
The future
Sponsored by
B1: Making market rent a reality
Speakers: Richard Evans, Assistant Director,
Strategic Partnerships, Thames Valley
Housing Association
Pippa Read, Head of North London Region,
Genesis Housing Association
Chair: Laura Kavanagh, Policy Officer,
National Housing Federation