Place AGM 2013: Matt Crompton
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Transcript of Place AGM 2013: Matt Crompton
Matt CromptonJoint Managing DirectorMuse Developments
A national developer's perspective on the market
Place AGMThursday, 11 April 2013
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)
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)
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
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
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
Muse in the North West
New Bailey & Chapel Street, Salford
• Largest ever planning application• CPO confirmed• Land assembly well advanced
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
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
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
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
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.
Challenges and Lessons Learned
• Occupiers are key (excl. residential)
• Lease terms are critical
• Firmly focused investor criteria
• Emerging markets
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?)
Viability in a challenging market
How do schemes stack up?
• Pre-let and/or forward funded
Viability in a challenging market
How do schemes stack up?
• Pre-let and/or forward funded
• Council-anchored
Viability in a challenging market
How do schemes stack up?
• Pre-let and/or forward funded
• Council-anchored
• Speculate selectively (with public subsidy)
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
The Muse property prognosis
• Time to prepare for the upturn
• Choose your partner carefully
• Target opportunities using crosshairs
• The North West in context (again)
Matt CromptonManaging DirectorMuse Developments
A national developer's perspective on the market
Place AGMThursday, 11 April 2013