Morgan Sindall Group Plc · LSE:MGNS
Morgan Sindall — Corporate Update (July 2012)
74 slides from Morgan Sindall's corporate update, Jul 3, 2012
Slide 1: Regeneration.
Regeneration. Morgan Sindall Group plc Presenta4on to City Analysts – 3 July 2012
Slide 2: Introduction – Paul Smith
Introduc4on Paul Smith Chief Execu4ve, Morgan Sindall Group plc
Slide 3: Itinerary
Introduc4on itinerary. 10.00 Muse presenta4on 12.30 Lovell presenta4on ‘The regenera)on project cycle’ ‘Reviving a community’ 11.20 Walking tour through Salford 1.15 Lunch (Crowne Plaza) and Manchester 2.25 Tour of east Manchester 12.15 Northern Quarter tour 4.15 Train departs
Slide 4: What is regeneration?
Introduc4on What is regenera4on? § Working in long term partnerships with our clients to use their land and property assets to achieve large-‐scale social and economic renewal § Usually a complex scheme delivered in joint venture, typically using publicly-‐owned land currently in sub-‐op4mal us
Slide 5: What drives regeneration?
Growing regenera4on What drives regenera4on? § General -‐ £17bn of land and assets suitable for development held by public sector -‐ Government land and disposal strategy; land is key to promo4ng economic growth, housing delivery and community ac4on -‐ Mixed-‐use developments allow cross-‐subs
Slide 6: Mab Crompton
Mab Crompton Joint Managing Director, Muse Developments
Slide 7: Contents
Contents regeneration. § Track record § Muse current pordolio § The regenera4on process § Site visits § Muse pipeline
Slide 8: Barbirolli Square, Manchester
Barbirolli Square A former bus sta4on used Manchester for surface car parking
Slide 9: Barbirolli Square, Manchester
Barbirolli Square Office and leisure development 1996 Manchester 85% pre-‐let and forward funded £60m
Slide 10: HMRC Newcastle Estate
HMRC Inefficient, unsuitable and Newcastle Estate dated office accommoda4on
Slide 11: HMRC Newcastle Estate
HMRC 1.6 million square i offices 1998 Newcastle Estate 100% pre-‐let and forward funded £160m
Slide 12: Quayside, Newcastle upon Tyne
Quayside A derelict wharf Newcastle upon Tyne
Slide 13: Quayside, Newcastle upon Tyne
Quayside Three phases of offices, hotel, 2002 Newcastle upon Tyne bars, restaurants and car parks £200m
Slide 14: Chatham Place, Reading
Chatham Place Redundant mul4-‐storey car park Reading
Slide 15: Chatham Place, Reading
Chatham Place 300 apartments, leisure and MSCP 2003 Reading Phase 2 now planned for residen4al £100m
Slide 16: Merchant Gate, Wakefield
Merchant Gate Redundant railway sidings Wakefield and former milk bobling plant
Slide 17: Merchant Gate, Wakefield
Merchant Gate Phase 1: offices, residen4al, leisure 2005 Wakefield Phase 2: council offices £135m
Slide 18: Walkergate, Durham
Walkergate The site of a former carpet factory Durham used for surface car parking
Slide 19: Walkergate, Durham
Walkergate City centre venue with a hotel, 2006 Durham leisure, car park and residen4al £30m
Slide 20: St Paul's Square, Liverpool
St Paul’s Square Liblewoods’ computer building Liverpool
Slide 21: St Paul's Square, Liverpool
St Paul’s Square Three phases of offices, cafés, 2011 Liverpool residen4al and showrooms £150m
Slide 22: Regeneration key factors
Regenera4on key factors § 10-‐15 year projects provide visibility § Broad social purpose -‐ LAs want regenera4on, less focused on immediate realisa4on of land value § Cash efficient -‐ limited upfront land costs, forward funding, pre-‐let tenants fund construc4on costs § Risk/reward share -‐
Slide 23: The regeneration process
The regenera4on process IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § End to end integrated exper4se § Average project length 10-‐15 years § Flexibility within the process to respond to changing market dynamics § Efficient
Slide 24: Using track record to maximise the odds
Using track record to maximise the odds . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Published compe44ons (OJEU) § Rela4onships -‐ play to strengths -‐ banks -‐ beber than 4:1 odds -‐ professionals -‐ educated/ a
Slide 25: Low entry cost agreements, not land banking
Low entry cost agreements, not land banking . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § 70% of schemes secured via development agreements: MUSE RESPONSIBILITIES LANDOWNER RESPONSIBILITIES Secure planning Hold land in
Slide 26: Low entry cost agreements, not land banking
Low entry cost agreements, not land banking . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT
Slide 27: Managing numerous and diverse disciplines
Managing numerous and diverse disciplines . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT
Slide 28: Intellectual approach to future-proofing
Intellectual approach to future-‐proofing . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Research led -‐ Demand analysis -‐ Use classes -‐ Densi4es -‐ Planning costs/obliga4ons § Pordolio predominantly mixed-‐use →
Slide 29: Pursue the most efficient funding route
Pursue the most efficient funding route . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Return on Capital Employed is key § Funding priority: -‐ Owner occupier the occupier funds development -‐ Forward funding the long-
Slide 30: Construction risk transfer
Construc4on risk transfer . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Design and build: 100% construc4on risk transferred to main contractor § Bespoke contract: based on BPF but adapted over 25 years to suit Muse ris
Slide 31: Occupiers generate the value
Occupiers generate the value . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Market driven § Maximise pre-‐let § Lease terms are crucial value drivers -‐ rent -‐ inducement -‐ rent review -‐ lease length -‐ aliena
Slide 32: Know your target market
Know your target market . . . IDENTIFY SECURE ASSEMBLE MASTERPLAN/ SECURE CONSTRUCTION LET SELL OPPORTUNITIES LAND TEAM PLANNING FUNDING MANAGEMENT § Pension fund § Property companies § Syndicates § SIPPs § Individuals
Slide 33: The Muse pipeline – Nigel Franklin
The Muse pipeline Nigel Franklin Joint Managing Director, Muse Developments
Slide 34: The Muse pipeline
The Muse pipeline § Pipeline with end development value of £1.625bn, from 2012 to comple4on § Pipeline reflects projects where Muse controls land, mainly via Development Agreements § Further four projects at preferred developer stage of £605m, giving total pipeline of £2.23bn § Pipeline of >30 pr
Slide 35: Portfolio resilience
Pordolio resilience Regional split Sector split Scotland Other 8% North Yorkshire & Residential Offices West North East 19% 33% Industrial & Retail London Distribution 10% & South 30%
Slide 36: Urban Regeneration and Investments pipeline
Urban Regenera4on and Investments pipeline £m 500 450 400 350 300 250 200 150 100 50 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021+ Urban Regeneration £1.6bn Investments £0.2bn Preferred bidder £0.6bn
Slide 37: Current portfolio
Current pordolio Residen4al Office Retail Leisure Industrial
Slide 38: Ashton Moss, Ashton under Lyne
Ashton Moss Office Retail Ashton under Lyne Leisure Industrial 1998 – 2014
Slide 39: Basing View, Basingstoke
Basing View Preferred Basingstoke Residen4al Retail developer 2011
Slide 40: Brentford Lock West, London
BrenQord Lock West Planning secured Residen4al Retail London Leisure 2011
Slide 41: Bridge Street Quarter, Warrington
Bridge Street Quarter Preferred Office Retail Warrington Leisure developer 2011
Slide 42: Chatham Place, Reading
Chatham Place First phase Residen4al Retail Reading Leisure completed 2009
Slide 43: Cheadle Royal, Stockport
Cheadle Royal Stockport Office Leisure Completes 2017
Slide 44: Cherryhill, Larkhall
Cherryhill Residen4al Retail Larkhall Leisure Started on site 2012
Slide 45: Chester Central, Chester
Chester Central Planning Residen4al Office Chester Retail Leisure applicaDon 2012
Slide 46: Eurocentral, Lanarkshire
Eurocentral Lanarkshire Industrial Completes 2016
Slide 47: Granary Wharf, Leeds
Granary Wharf Leeds Residen4al Leisure 100% sold 2014
Slide 48: Grand Central, Stockport
Grand Central Preferred Office Retail Stockport Leisure developer 2011
Slide 49: Islington Wharf, Manchester
Islington Wharf Manchester Residen4al Leisure 100% sold 2012
Slide 50: Lewisham Gateway, South London
Lewisham Gateway Residen4al Retail South London Leisure Starts on site 2014
Slide 51: Lingley Mere, Warrington
Lingley Mere First phase Office Leisure Warrington Industrial completed 2010
Slide 52: Logic Business Park, Leeds
Logic Business Park Leeds Industrial Starts on site 2013
Slide 53: Manchester Victoria, Manchester
Manchester Victoria Land agreement Residen4al Office Manchester Retail Leisure exchanged 2011
Slide 54: Merchant Gate, Wakefield
Merchant Gate Second phase Residen4al Office Wakefield Retail Leisure completed 2011
Slide 55: Millbay, Plymouth
Millbay Second phase Residen4al Office Plymouth Retail Leisure completes 2013
Slide 56: Northshore, Stockton on Tees
Northshore Residen4al Office Stockton on Tees Retail Leisure Started on site 2011
Slide 57: Rathbone Market, Canning Town
Rathbone Market First phase Residen4al Retail Canning Town Leisure completes 2012
Slide 58: Rolls-Royce, Hucknall
Rolls-‐Royce Preferred Hucknall Residen4al Industrial developer 2011
Slide 59: Salford Central, Salford
Salford Central Residen4al Office Salford Retail Leisure Starts on site 2013
Slide 60: Smithfield, Manchester
Smithfield Sixth phase Residen4al Office Manchester Retail Leisure starts 2012
Slide 61: South Rings, Preston
South Rings Office Retail Preston Leisure Completes 2016
Slide 62: St Andrews, Bearsden
St Andrews Bearsden Residen4al Started on site 2011
Slide 63: St Paul's Square, Liverpool
St Paul’s Square Final phase Residen4al Office Liverpool Leisure completed 2012
Slide 64: Talbot Gateway, Blackpool
Talbot Gateway Office Retail Blackpool Leisure Signed 2009
Slide 65: Town centre, Swindon
Town centre Residen4al Office Swindon Retail Leisure Starts on site 2012
Slide 66: Waterdale CCQ, Doncaster
Waterdale CCQ First phase Residen4al Office Doncaster Retail Leisure completes 2013
Slide 67: Summary and Outlook – Paul Smith
Summary and Outlook Paul Smith Chief Execu4ve, Morgan Sindall Group plc
Slide 68: Summary and Outlook
Summary and Outlook § Lack of confidence and liquidity is holding back the market § Global uncertainty and austerity are hindering growth § Popula4on growth and increasing urbanisa4on driving demand for brownfield development § Government ac4vely looking to release and regenerate under-‐u4lised l
Slide 69: Summary and Outlook
Summary and Outlook § Our track record of delivery and ability to provide solu4ons to complex problems makes us a partner of choice § Technology and changing occupier needs will con4nue to feed the market § Muse and Lovell are well placed, respected and resourced to outperform rivals § Regenera4
Slide 70: Site visits – New Bailey, Salford
Site visits New Bailey, Salford
Slide 71: Site visits – Manchester Victoria
Site visits Manchester Victoria
Slide 72: Site visits – Smithfield
Site visits Smithfield
Slide 73: Site visits
Site visits
Slide 74: Morgan Sindall Group plc contact details
Morgan Sindall Group plc, Kent House, 14-‐17 Market Place, London W1W 8AJ Tel: 020 7307 9200 [email protected] @morgansindall morgansindall.com