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National Planning Forum The Major Developers Group • Roger Madelin (Argent Group) • Malcolm Kerr (Dp9) • Stephen Musgrave (Hines) • Liz Peace (BPF) • Hugh Bullock (Gerald Eve) • Mike Hussey (Land Securities) • Adrian Penfold (British Land) • Toby Courtauld (Great Portland Estates) • David Watkins (Linklaters) • Stuart Lipton (Chelsfield) • John Irvine (Grosvenor Estates) • Mike Gallimore (Lovells) • Peter Rees (City of London) • Peter Cole (Hammerson) • Nick Shattock (Quintain) • Peter Bishop (Design for London) • Patrick Robinson (Herbert Smith) • John Rhodes (RPS) • John Walker (Westminster City Council) Introduction The Major Developers Group – Commercial and residential development. Group includes town planning surveyors and lawyers and planning directors. Working with - LGA, London Councils, Planning Officers Society, HBF, BPF, CBI, London First. 2 UK Economy Enters Recession YoY% 5.0 4.3 3.8 4.0 2.9 2.8 3.1 3.0 2.3 2.0 1.0 3.4 3.3 3.0 2.9 3.1 2.8 2.4 2.1 2.2 2.2 1.8 1.3 1.0 0.8 0.2 0.0 -1.0 -1.4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -2.0 -0.8 Source: Experian; Jones Lang LaSalle 3 Job Numbers Falling 6.0 4.0 % 2.0 0.0 -4.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -2.0 Total FTE Employ ment FBS Employ ment Source: Experian; Jones Lang LaSalle 4 Yields to rise further Equiv alent Yield % Retail Industrials Office 14.0 12.0 10.0 8.0 6.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 4.0 Source: IPD; Jones Lang LaSalle 5 …and Capital Values to Decline Retail Office Industrial 20 10 % 0 -10 -30 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -20 Source: IPD; Jones Lang LaSalle 6 Recession • • • • • • Unprecedented decline in values No new starts in commercial Housing 30,000/50,000 units??? No bank or housing finance Share prices halved at best No understanding yet of when the market will bottom out or finance will be available • Inflation has taken us out of problems for years, deflation will highlight them 7 Planning • Planning process needs change from adversarial to cooperative • Need joined up approach with Government and Local Authorities • Killian Pretty Review helpful • Free up the system – 60 years, 944 documents, 800 pages of policy • More understanding from developers and more planning personnel required • Bring certainty to CIL and 106s • Major Developers Group experience is that 80% of organisations involved agree the criteria required 8 Construction • No more wow factor wiggly wobbly architecture with strange shapes • Austerity in the past produced ingenious designs • Building inventiveness to move from Roman style to the modern era of construction with functionality driving productivity based on high quality engineering solutions • Less red tape, proper time to plan building construction rather than last minute • Less waste, better design, more efficient construction logistics and value engineering = 30% cost saving 9 Commercial • Better product at lower cost • Cost pressures/quality of life issues likely to direct more building to regional hubs • Transport infrastructure and development coordinated to reduce costs and travel – people working in clusters with no more urban deserts • Village Green with civic and mixed use buildings 10 Process • More competition to improve quality • Increased civic pride to drive social and economic change • Maintain housing construction capacity and experience • Sustainability through innovation not just rules but a system to encourage new ideas 11 Housing • Need to have housing land surplus not deficit to avoid recurrence of overpriced land • Put earnings into GDP not land • Certainty of housing – Guaranteed delivery – Wider market supply (commercial developers, innovators, as well as house builders) 12 Conclusion • Government will need to finance infrastructure projects and maintain the housing supply chain • Partnership between Local Authorities and developers needed to improve quality and reduce cost of process • Innovation required to produce better product at lower cost 13