Regeneration in the UK Regeneration Investment Organisation UKTI

Regeneration in the UK Regeneration Investment Organisation UKTI Government Support to Major Regeneration Projects www. ukti-regeneration. com

Regeneration in the UK Sir Michael Bear Chair, RIO & UK Special Envoy for Sustainable Urbanisation - China

Regeneration in the UK UK Government Mandate for RIO. . “A new one-stop-shop has been set up (RIO) to help international investors identify and fund regeneration opportunities in the UK. These projects won’t just mean new jobs in London or the South East - but right across the whole country” The Prime Minister at the Lord Mayor’s Banquet (11 th November 2013).

Regeneration in the UK UK Government Mandate “We have a really strong supply of regeneration projects in the UK - over £ 100 billion in capital value. But currently the offer is fragmented with delays and it’s difficult for investors to navigate. The Regeneration Investment Organisation provides a great opportunity to announce a radical new approach to helping boost investment into the UK”. “RIO acts as the “honest broker” and provides a fantastic way of helping investors find and invest into a credible range of UK wide pipeline of regeneration opportunities. It does this by having a dedicated regional team and development experts, set project criteria in determining an “investible project”, and by working with UK partners through a high level advisory board. It will therefore build on the success of the investment secured at Battersea Power Station, by creating an easier point of entry for investors. By creating stronger links with local and national partners, RIO will help to remove some of the barriers faced by partners to project delivery, which will enable sustainable jobs and growth across the regions within the UK”. Sir Michael Bear, RIO Chairman

4 Regeneration in the UK UKTI: Who we are … UK Trade and Invest Strategic Relations and Investment Team: • High level relationships with the largest institutional investors globally • Access to UK based expertise and across Whitehall • Access to global network of UK Embassies • Supporting key UK regeneration projects. Aim to promote growth and jobs • Under Lord Livingston • Team of industry Experts/FCO/BIS

8 Regeneration in the UK Why Invest in Regeneration in the UK? High socio-economic impact § Building communities and accelerating jobs and growth § Pipeline could create significant jobs and positively impact on GDP § Opportunities are spread across major economic zones in UK High quality pipeline § High quality and diverse range of opportunities § Over £ 100 bn worth of projects, many of which are “shovel ready” 60% § Strong private-sector support Flexible investment options § A range of equity ticket sizes § Equity, debt or mezzanine investment options § Islamic financing structures are available Strong developer base & government support § Large base of international developers with local expertise, successful track-records and strong balance sheets § UK ranked in the top 3 in the European Union for dealing with construction permits 1 § A range of government incentives - planning/business rates 1. Source: 2012 World Bank Ease of Doing Business

Regeneration in the UK 7 Government Unlocking Growth • Removing Barriers to Growth – RIO helps to unlock growth – the how will be dealt with later • Making strategic investments to provide vital infrastructure –working with our network of UK Embassies • Ease of Permits – World Bank Ease of Doing Business 2013 ranked UK as the second best major economy G 7 for dealing with construction permits • National Planning Framework - fast track economic and housing appeals – 88% major planning applications are granted in 6 months

Regeneration in the UK Decentralising and Providing Incentives for Growth • 39 Local Enterprise Partnerships – businesses & councils coming together to help determine local priorities • 24 Enterprise Zones – specific areas where a combination of financial incentives and reduced planning restrictions apply City Deals – these cities will negotiate deals with government with new powers for greater responsibility and how public money is being spent – first wave 8 Core Cities & Wave 2 involves 20 Cities Regional Growth Fund a £ 3. 2 bn fund supports eligible projects that are also raising private sector investment to create economic growth (round 6) Local Growth Fund As part of Autumn Statement 2013 the Chancellor announced that £ 50 m of the Local Growth Fund will provide targeted support Private Rented Sector – a £ 1 bn fund to support development of private rented homes • •

Regeneration in the UK Growing Demand • Strong investor confidence in the UK and growing demand for UK projects • £ 1. 13 Trillion firepower for the UK regeneration • Move away from trophy London assets to greater returns elsewhere • Recent successes: • London – £ 1 bn in Royal Albert Docks - ABP China – £ 840 m in 1 Nine Elms - Wanda (£ 90 m purchase) – £ 8. 4 bn Battersea Power. Station – SP Setia (£ 400 m purchase) • Outside London – £ 700 m for residential development in Manchester Liverpool, Solihul and London 7

Regeneration in the UK Nahid Majid OBE Chief Operating Officer RIO

11 Regeneration in the UK RIO Principles 1. Regeneration – jobs and growth in the UK LEPs C 2. Credible offer assessed by industry criteria – our PID Project Initiation Document 3. Transparency through our Advisory Board acting as the Honest Broker for industry and investors Local Authorities B A Approved by industry Devolved Administrations Input and managed by local partners City Councils RIO approved projects are assessed on project value, job creation and regional impact and planning status A: Shovel ready with planning B: Early stage planning C: Concepts

Regeneration in the UK RIO Advisory Board Damian Nussbaum and Michael Boyd, UKTI David Prout, Department for Transport - HS 2 Duncan Sutherland, Sigma In. Partnership Jon Milward, Deloitte David Partridge, Argent John Herbert, HSBC, Neil Mc. Ivor, Office of the First Minister and Deputy First Minister of Northern Ireland Greg Ward, City of Edinburgh Council, Scotland James Price, Welsh Directorate of Economy, Science and Transport Peter Geraghty, Royal Town Planning Institute, Urban Planning & Design Stephen Dance, HM Treasury Jonathan Harris, Macquarie Regional Representation Phillip Cox, Steven Quartermain, DCLG Bill Oliver, St Modwen Industry, Finance & Commerce Government Sir Howard Bernstein, Manchester City Council Chaired By Sir Michael Bear Sir Edward Lister, Greater London Authority, Chris Murray, Core Cities Michael Newey, Royal Institute of Chartered Surveyors Michael Parkinson CBE, Liverpool University

Regeneration in the UK Delivery Model • Strong pipeline of credible projects backed by industry, championed by government - Supply Side confidence through our technical assessments Project Initiation Document PID • User-friendly online platform for promoting and showcasing projects • Build and maintain strong relationships with international investors understand the demand side • Utilisation of UKTI’s network of UK embassies and 270 posts globally • Intelligent matching of supply, assessed projects though an industry technical team PIDs and a demand audit of “investor asks” • Cross-Government Sounding Board and Expertise _ Quarterly reviews with the RIO Advisory Board - Risks managed and mitigated Reactive Proactive Risk Mitigation Delivery Model Review & Success

Regeneration in the UK Project Selection Criteria – PID Project Initiation Document • Background information: project, size, location & development partner • £ 100 million threshold – £ 3 plus billion (£ 50 million where substantial regional jobs will be created) invetsment scale • Market Demand - Appraisals • Economic – likely Jobs and growth/supply change • Key Timings. Messaging and transparency • Land assembly and stage of planning • Investment type – JV, developer partner, passive or active • Potential Commercial Returns 13

Regeneration in the UK What we can offer Project Promoters? • Identifying key sites and packaging of proposals – capacity and scale • Defining type of investment opportunity – Joint Ventures, full acquisitions, developer partnerships • Assessment against industry and Government backed national criteria • Inclusion on the online RIO Project Pipeline and in the pitchbook • Reaching out internationally to raise profile – through overseas posts • Attracting/marketing inward investment – match making as the honest broker • Partnering with developers and investors • Sharing Learning and Best Practice • Continuous Dialogue through the UKTI team and RIO 20

Regeneration in the UK Investor Portfolio and Asks A range of investors and a range of requirements / investment type / risk appetite. • • • £ 100 m + / project and scale Clear commercial returns across a range of diverse finance options Relationships JV and legacy Skills transfer to home markets Strategic positioning within a sector or market Finance and developer partnerships Interest shifting out of competitive London market Central and Local Government support or incentives/guarantees/messaging and transparency Publicity Challenges: • Understanding and differentiating UK regions • Reaching the preferred project scale (£ 100 m) • Project timings - Procurement, Regulations 17

Regeneration in the UK Investor Asks Q 1 Which areas of the UK Regeneration space does the investor have an appetite for? • Greenfield | Brownfield Land | Projects with or without planning permission Q 2 Which sectors does the investor have an appetite to invest in? Q 3 What type of role does the investor seek? • Passive to active | Sole or Partnerships | Development | Joint venture to full acquisition Q 4 What is the Investors preferred project status? • ‘shovel ready’ or ‘opportunity to shape concept’ | Long or short term investment. Q 5 What is the Investors preferred project scale? • Preferred GDV (Gross Development Value) of project, minimum GDV to be over £ 100 M Q 6 What are the investors preferred locations? Across all of UK Q 7 What is the Investors previous track record? • Previous investments in the UK and Globally in Regeneration real estate sector Q 8 What are the target returns of the Investor? • Mandated returns the fund needs to secure from its Capital | Targets | Return on Capital (ROC)/Internal Rate of Return (IRR).

Regeneration in the UK What we can offer Investors? • Understanding key markets, regulatory regimes and investing in the UK • Help for overseas investors navigating routes to market in UK • Raising awareness of specific opportunities • Building relationships and legacy with all stakeholders to understand agendas, facilitate introductions and hold bilateral discussions • Unblock key investment obstacles in the UK & with Overseas Posts and UK Embassies 19

Regeneration in the UK The RIO Project Pipeline - Online Portal • Dynamic online platform showcasing all RIO Projects actively seeking investment • Viewing by registered users only • Users prompted to submit enquiries to the RIO team for further follow-up www. ukti-regeneration. com

Regeneration in the UK Our Achievements to Date & Going Forward • Strong partner relationships with private developers, LEPs and LA’s • Project pipeline totals £ 100 bn GDV of projects (90% outside London) - potential 550, 000 jobs. • By asset class the projects break down by 90, 000 residential units, 67 m ft 2 of Commercial space and 39 m ft 2 of industrial space. • Supply Side: We have over 100 projects being assessed PIDs • Demand Side: A RIO Investor Strategy in Place – Priority Markets • Our ‘shovel ready’ (those actively looking for investment) projects currently total 38 with a value of £ 30 bn and 170, 000 potential jobs. • There a number of active commercial dialogues and MOUs in place with over £ 10 bn potential investment into the UK • Next Steps for RIO – RIO Local and Regeneration Investment Vehicle • Working alongside our expert partners will further enable RIO to support and unlock major regeneration projects across the UK

Regeneration in the UK A One-Stop-Shop for Regeneration Projects in the UK www. ukti. gov. uk/RIO