CAPITAL GROWTH · 2019. 12. 19. · answer session and any other related verbal or written...
Transcript of CAPITAL GROWTH · 2019. 12. 19. · answer session and any other related verbal or written...
Transforming Regenerating Revitalising
CAPITAL GROWTH
CAPITAL MARKETS MORNING – 25 JANUARY 2017
Transforming Regenerating Revitalising
OVERVIEW
CAPITAL GROWTH focuses on maximising value by
developing the land and property portfolio to its optimum
extent, thereby growing the company’s Net Asset Value (NAV).
Our core skill is to transform underutilised and
undervalued land into valuable residential or commercial
development sites. The strategic imperative for the business
is therefore to continue the pipeline of value growth and to
replenish the portfolio with further land to sustain the business.
TODAY
BEFORE
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Transforming Regenerating Revitalising
HOW WE CREATE AND ADD VALUE
Competitive advantage comes from our ability to add value through management actions rather than reliance on market movements
Acquisition &
Land Assembly
Masterplanning
Planning Approval
Value Engineering &
Land Remediation
Infrastructure Development
Plot Sale / Build Out
Ind
ica
tive
Va
lue
Ad
d
Asset Management
Acquisitions Strategic Land Major Projects Income
Time
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Transforming Regenerating Revitalising
SUMMARY OF OUR PORTFOLIO
TOP 10 SITES
Site Location AcresHouse plots Employment space
Consented Sold/Built Consented Built
CA
PIT
AL
GR
OW
TH
Waverley &
AMPYorkshire 587 3,890 740/550 2.1m sq. ft 1.2m sq. ft
Logistics North North West 763 -- -- 4.0m sq. ft 1.5m sq. ft
Rossington Yorkshire 344 1,200 74/15 0.1m sq. ft 0 sq. ft
Lounge Midlands 103 -- -- 0.8m sq. ft 0 sq. ft
Prince of Wales Yorkshire 303 917 226/110 0.3m sq. ft 0 sq. ft
Harworth Midlands 173 996 118/74 0.8m sq. ft 0 sq. ft
Coalville Midlands 200 1,100 0 - -
TOTAL 2,473 8,103 1,158/749 8.1m sq. ft 2.8m sq. ft
INC
OM
E Asfordby Midlands 133 -- -- 0.3m sq. ft 0.3m sq. ft
Gascoigne Yorkshire 279 -- -- 0.3m sq. ft 0.3m sq. ft
Rockingham Yorkshire 430 -- -- 0.2m sq. ft 0.2m sq. ft
TOTAL 3,315 8,103 1,158/749 8.9m sq. ft 3.5m sq. ft
60% of our portfolio value sits within ‘Capital
Growth’ (over £210m)
• Our focus is on brownfield sites with greater value
enhancement potential
Top 10 sites represent c.60% of portfolio value
Top 20 sites represent c.80% of portfolio value
• Number of sites and acres being reduced to improve
portfolio focus
Waverley
Logistics NorthRossington
Lounge
Prince of Wales
Melton Commercial Park
Gascoigne
Gateway36
Harworth
Coalville
Next 10 Remaining properties
£363.9M
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Transforming Regenerating Revitalising
WE CONTINUE TO GROW OUR PORTFOLIO
Major Developments
£146.0m
Agricultural Land£21.6m
Natural Resources
£18.8m
Strategic Land
£45.9m
Business Parks
£75.6m
Major Developments
£157.6m
Agricultural Land£22.8m
Natural Resources£20.8m
Strategic Land
£52.4m
Business Parks
£90.9m
Major Developments
£163.4m
Agricultural Land£20.0m
Natural Resources£23.5m
Strategic Land
£56.2m
Business Parks
£100.9m
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SALES PROCEEDS H2 2015
MDS £20.83m
STL £5.29m
TOTAL £26.12m
SALES PROCEEDS H1 2016
MDS £7.58m
STL £0.91m
TOTAL £8.67m
£307.8m
£15.9m
£22.8m(£13.7m) £11.8m
£344.5m
£10.1m
£12.8m (£11.3m) £7.9m
£363.9m
£280m
£290m
£300m
£310m
£320m
£330m
£340m
£350m
£360m
£370m
£280m
£290m
£300m
£310m
£320m
£330m
£340m
£350m
£360m
£370m
InvestmentProperty @
30/06/15
Site Expenditure Acquisitions Disposals Fair ValueAppreciation
InvestmentProperty @
31/12/15
Site Expenditure Acquisitions Disposals Fair ValueAppreciation
InvestmentProperty @
30/06/16
Movements in Investment Property
Transforming Regenerating Revitalising
HOW CAPITAL GROWTH IS REALISED
COMMERCIAL &
MASTERPLANNING
STRATEGY
LAND ENABLEMENTDEVELOPMENT &
INFRASTRUCTURE
SECURING AN END USE
FOR INDIVIDUAL PLOTS
VISION
MARKET ASSESSMENT
PLANNING
REMEDIATION
RESTORATION
ENGINEERING LANDFORM
ROADS AND SEWERS
SERVICES
OFF-SITE ENABLEMENT
WARRANTIES
OCCUPIERS
DEVELOPERS/HOUSEBUILDERS
INVESTMENT
BUSINESS DEVELOPMENT
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Transforming Regenerating Revitalising
COMMERCIAL & MASTERPLANNING STRATEGY
• We establish a vision and confirm market assessment for
each of our sites
• Our sites are then masterplanned for appropriate uses
• We work effectively with local stakeholders to understand
the nature of our landholdings and the context of the local
area they sit within
• Planning consents secured for over 11,000 plots and 10m
sq. ft of commercial space since 2008 (see right)
• Target set of securing 1,000 residential plots per annum
on average in order to deliver further value.
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Transforming Regenerating Revitalising
FORMER THORESBY COLLIERY, NOTTINGHAMSHIRE
800 plots
25 acres of employment
Planning submitted 23/12/2016
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Transforming Regenerating Revitalising
RESIDENTIAL LAND: OUR PLANNING PIPELINE
SITE PLOTSPREDICTED DETERMINATION
DATE
Market Warsop (PPA) 400 Q1 2017
Thoresby 800 Q1/2 2017
Partnership sites (overages) 526 Range of dates in 2017
TOTAL 1,716
2,417 2,312
0
500
1,000
1,500
2,000
2,500
3,000
2017-2020 Beyond 2020
• Planning preparation and promotion was focused on in 2016, with a range of applications submitted in H2. Future pipeline identified
with representations made to secure planning
Plots with
outline consentPlots with Resolution
to Grant consent
65
31/12/2015 Consent and RtGin H1 2016
Purchased Sold 30/06/2016
10,299
(335)
10,029
CONSENTED RESIDENTIAL PLOTS IN PORTFOLIO POTENTIAL APPLICATIONS
APPLICATIONS MADE IN 2016
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Transforming Regenerating Revitalising
COMMERCIAL LAND: PLANNING PIPELINE
7.8m 0.1m
2.6m 0m 10.5m*
31/12/2015 Consent and RtGin H1 2016
Purchased Sold 30/06/2016
3.6.m
2.5.m
0.0m0.5m1.0m1.5m2.0m2.5m3.0m3.5m4.0m
2017-2020 Beyond 2020
• Purchase of Temple Green, Leeds has pushed consented space within our portfolio to over 10m sq. ft for the first time. Pipeline of
applications provide opportunities for both Capital Growth and future Income Generation
* 10.5m includes 2.6m sq. ft of consented space at Temple Green that is owned by Aire Valley Land
LLP - our 50% JV with Evans Property Group
SITE SPACEPREDICTED DETERMINATION
DATE
Daw Mill 265,000 sq. ft Q1 2017
Kellingley 1,400,00 sq. ft Q2 2017
Thoresby 250,000 sq. ft Q2 2017
TOTAL 1,915,000 sq. ft
Sq. ft of space with
outline consentSq. ft of space with Resolution
to Grant consent
CONSENTED COMMERCIAL LAND IN PORTFOLIO POTENTIAL APPLICATIONS
APPLICATIONS MADE IN H2
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LAND ENABLEMENT
• Tackling former industrial sites that have operated in their
previous guises for up to a Century often brings a number
of technical challenges to bear when considering their use
• The team is expert in delivering cost-effective solutions by
using their expertise and experience to turn brownfield
land into development platforms that match the use we
have proposed
• This work often includes the demolition and recovery of
former industrial structures as part of delivering the
identified vision for the development.
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Transforming Regenerating Revitalising
WAVERLEY, ROTHERHAM
WAVERLEY BEFORE
WAVERLEY NOW
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Transforming Regenerating Revitalising
DEVELOPMENT & INFRASTRUCTURE
• We invest in and develop infrastructure on our major
developments in order to facilitate serviced development plots,
paid for using money recycled from previous land sales.
• Spend is only incurred however if it is value enhancing by de-
risking the site (in providing warranties as an example) and/or
brings it forward for plot sales or further development.
• Work is brought forward in phases as our track record shows that
higher values are unlocked through phased sales as our sites
mature into established locations.
• As the portfolio develops, we anticipate bringing forward more
points of sale to increase portfolio momentum, unlock further
value and diversify risk. This could include new sectors,
including PRS, retail centres and retirement homes.
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Transforming Regenerating Revitalising
PRINCE OF WALES, PONTEFRACT
SUMMER 2015
AUTUMN 2016
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SECURING END USES FOR OUR SITES
• Once we have secured an end use for a site and have prepared land
accordingly, we either sell engineered land for residential or commercial
purposes or retain land in order to increase our income portfolio
• We plan the disposals of properties carefully to extract maximum value from
our land portfolio, with gains achieved over book value on all major sites –
with cash then reinvested in the development cycle
• Housebuilders that have purchased some of our plots include Barratt
Developments, Taylor Wimpey, Harron Homes and Keepmoat. We have
also sold land for commercial uses to local, national and international firms,
including Rolls-Royce, Aldi, Lidl and a range of manufacturers and retailers
• We retain our landholdings should a detailed assessment show that market
conditions support its use for future income generation. Land that has been
retained for us to develop our own commercial income portfolio include key
sites at Bolton (Logistics North), Rotherham (the AMP) and Barnsley
(Gateway 36). This approach would also apply on current and future Joint
Ventures, including our JV with Evans Property Group at Gateway 45 Leeds.
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Transforming Regenerating Revitalising
The markets in our home regions remain robust.
RESIDENTIAL
Demand for land remains steady, with housebuilders reporting
consistent plot sales in the North and the Midlands. This is
underpinned by housing starts in the UK continuing to be well below
acknowledged Government targets (140,000 house starts in 2015 vs. a
national housing target of 250,000 starts), whilst Government
incentives such as Help to Buy remain in place.
COMMERCIAL
Demand for well-connected industrial and logistics space remains good
with an under-supply of new units reported in all of our regions, both
under and above 100,000 sq. ft, allied to consistent occupier demand.
The industrial and logistics sector appears to be the most attractive of
the commercial real estate sectors and with a number of our sites close
to key motorway and principal road junctions, we are well-placed to
take advantage of this trend.
OUR MARKETS ARE ROBUST
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Transforming Regenerating Revitalising
FUTURE STRATEGY & OUTLOOK
We have a clear strategy to increase the value of our landholdings
sustainably over time, supported by the solid interest in the property
sector in our core regions and the experience and expertise of the team.
• We will continue with our stated strategy of exploiting portfolio opportunities by
optimising land use and securing planning consents for both residential and commercial
uses.
• We will also continue to invest in the sites in our portfolio with the highest value
enhancement potential, whilst increasing our points of sale to increase value creation
and to diversify risk.
• Investing in the sites with the highest value-add potential will also provide further outlets
for us to build new commercial units that can be retained as income-producing assets.
• Lower value sites with little development potential will continue to be sold to free-up
management time further.
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Transforming Regenerating Revitalising
DISCLAIMER
• For the purpose of the following disclaimer, reference to this ‘presentation’ shall be deemed to
include reference to the presentation slides, the presenters’ speeches, the question and
answer session and any other related verbal or written communication.
• References in these slides to financial information for the full financial year ending 31
December 2016 are to an average of forecasts from Canaccord Genuity Limited (11/01/2017)
and Investec Bank plc (11/01/2017), following the Company’s trading update on 10/01/2017.
• This presentation, which has been issued by Harworth Group plc (‘Harworth’), comprises
slides for a presentation for a Capital Markets Morning hosted on 25 January 2017 and is
solely for use at such presentation. This presentation is confidential and may not be
reproduced, redistributed or passed directly or indirectly to any person or published in whole
or in part for any purpose.
• This presentation includes forward-looking statements with respect to the business,
performance and financial condition of Harworth. By their nature, these statements may
involve uncertainty given future events and circumstances can cause results and
developments to differ materially from those anticipated. Any forward-looking statements
reflect knowledge and information available at the date of preparation of these slides. Nothing
in this presentation should be construed as a profit forecast. Harworth gives no undertaking
to update these forward-looking statements.
• Actual results may differ materially from those expressed in forward-looking statements. As
such, you are cautioned not to put undue reliance on any forward-looking statements. No
investment advice is being given in this presentation. No representation, warranty or
undertaking is given by, or on behalf of, Harworth or any of its directors, officers, employees
and advisers that Harworth will achieve any results set out in such statement or as to the
accuracy, completeness or reasonableness of any projections, targets, estimates, forecast
statements, beliefs, opinions or information contained in or given during this presentation and
no liability is accepted or incurred by any of them for or in respect of the same, provided that
nothing in this paragraph shall exclude liability for any representations or warranty made
fraudulently.
• In making this presentation available, Harworth makes no recommendation to buy, sell or
otherwise deal in shares in Harworth or in any other securities or investments whatsoever,
and you should neither rely nor act upon, directly or indirectly, any of the information
contained in this presentation in respect of any such investment activity. Past performance is
no guide to future performance. If you are considering engaging in investment activity, you
should seek appropriate independent financial advice and make your own assessment.
• By accepting these presentation slides, you agree to be bound by the above conditions and
limitations.
• This presentation does not constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to purchase, any shares in Harworth or any other securities, nor shall it
or any part of it, nor the fact of its distribution form the basis of, or be relied upon in connection
with, any contract or investment decision related thereof.
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