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News Release from: Chartered Institute of Building [CIOB] | Subject: Urban development companies
Edited by the Buildingtalk Editorial
Team on 12 October 2005
Investment sustains the construction
workload
Urban development companies 'sweating their assets' to attract billions from private sector.
The development programme of English Partnerships, the United Kingdom's regeneration agency, is now running at around GBP500 million a year and likely to grow further in the current financial year The increasing momentum of investment in collaboration with the regional development agencies and local authorities in England is helping to sustain the construction industry's workload at a time when other industries are experiencing a downturn in activity
This article was originally published on Buildingtalk on 12 Mar 2004 at 8.00am (UK)
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The year 2004-05, according to the English Partnerships chief executive David Higgins, saw an 18 per cent increase in the agency's volume of investment, which stood at GBP483 million by the end of the year.
Programme receipts also showed a substantial increase, 46 per cent.
Revenue growth on this scale is doing much to encourage the Government to support this form of public funding which has been bringing in an equivalent quantum of private sector money.
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The challenge now is to raise the private investment side of the equation from 1 to 1.5.
If this succeeds, and there are abundant signs that it will, the growth outlook for the industry will become even more positive.
Recently, at the fourth conference held by England's 21 urban regeneration companies, Mr Higgins said that to date a total of GBP900 million in public sector funding, matched equally by the private sector, has been invested across these urban development companies, a concept initiated as far back as 1999 by the urban development task force led by Lord Rogers.
Mr Higgins told the conference that they need to come up with ways of 'sweating their assets' to maximise the full potential of the sites and land they hold.
Their assets in land are considerable, totalling some 300,000 hectares in all.
He said: "The strong challenge to us all is to generate even further leverage for our investment and capture the value of the land we regenerate." The estimates now being considered by English Partnerships and the regeneration companies forecast a potential for nearly GBP15 billion private sector investment and creation of some 70,000 new homes.
The immediate investment ambitions of the URC network already encompass close to GBP10 billion in total, around GBP8 billion from the private sector and GBP1.7 billion from public funds.
The primary focus of policy at present is on development projects to generate new employment and reverse the trend to economic decline in Britain's urban centres.
Examples include Liverpool's Lime Street Gateway for which planning consent is being sought by English Partnerships with the preferred development partner, Liverpool-based Iliad; Catalyst Corby central business park being developed by Priority Sites, a joint venture company owned by the Royal Bank of Scotland and English Partnerships; Manchester Central Business Park for which Ask Akeler has been appointed as preferred developer for Phase 1, due for completion in the Autumn of 2009; and the GBP400 million Sheffield Retail Quarter designed to attract quality retailers and new shoppers back to the city centre.
When fully developed, the Manchester central site will offer some 500,000 sq.
m of office space in a regeneration project billed as the U.K.'s first mixed-use urban business park.
The recently established East Midlands Property Investment Fund brings together the commercial portfolio of the regional development agency, land and funds from English Partnerships, with matched investment from a private sector partner.
This may also prove a potent source of economic growth.
Milton Keynes planning tariff.
As a member of the Milton Keynes Partnership, the agency is participating in the development committee guiding the planned growth in this area of the South Midlands.
English Partnerships is also promoter and co-ordinator of the infrastructure tariff proposed as an alternative to negotiating developers' contributions under Section 106 of the current planning legislation.
The tariff is being imposed both on residential and commercial developments at GBP18,000 per unit.
Taking the Milton Keynes' forecast of 16,500 new homes and adding, say, 3,500 for commercial uses, the tariff would make around GBP350 million available to fund road improvements, schools and community facilities.
This of course is made up of one-off payments over the life of the growth project.
The principle of the tariff is accepted by the British Property Federation which is advocating it as an alternative to the planning gain supplement proposed by Kate Barker in her Housing Supply report.
The federation believes that tariffs will provide developers with greater certainty, since their level will be known up front and can be factored into development costs.
A tariff-based solution, they say, could be collected from all types and sizes of developments and would not be constrained in accessing only a small group of large developers.
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