In line with our strategy of balance and diversity,
the emphasis of our business has broadened in recent years, from undertaking
individual developments in Central London, in two important respects.
Following our success at PaddingtonCentral, we have continued to seek out
projects that involve significant regeneration. Not only does urban regeneration
offer those direct stakeholders in the property itself a significant reward
for the risks and complexities undertaken, it also benefits those communities
adjacent to these developments and the people working within them. With
such projects taking place in locations which have perhaps been undervalued,
it is often the case that rental levels improve significantly. Additionally,
investment yields will often also improve, reflecting the perceived improved
status of the location.
The more large-scale projects we undertake successfully, the more we are
recognised as responsible and capable partners to local authorities seeking
effective regeneration. The quality of our professional team coupled with
our ability to externally fund large-scale projects, limiting the risks
for all parties, is increasingly making us the preferred regeneration partner.
To some extent, a virtuous circle is created. Whilst our track record in
large-scale projects continues to expand, significant scale brings with
it a requirement for an extended vision of the character and environment
of the development to be created and with it, invariably, a considerable
amount of construction and legal complexity. These factors represent significant
barriers to entry for competing developers.
It is, of course, not just in London where regeneration activity is needed
and, over the last few years, we have secured similar schemes in provincial
cities and towns with the same strategic objectives. The Heart of Slough
project entails circa 350,000 sq. ft. of prime office accommodation alongside
a much larger residential component. In Birmingham, we acquired in 2006
an 11-acre site which will ultimately contain over one million sq. ft. of
mixed-use accommodation. In many ways, this site is similar to the PaddingtonCentral
scheme in Central London in that it is a large tract of land close to a
major rail terminus, bordered both by a railway line and a canal.
As our track record shows, we are not limited to any geographical area
in the UK, but we will tend to focus on the major conurbations where large-scale
urban regeneration projects are sourced.
One of the benefits of a regional approach to urban regeneration is that
land tends to be more affordable. This reduces specific asset risk and competition
to acquire additional projects is less intense than that experienced in
London. Such a strategy self-evidently also provides a geographically diversified
risk profile. Finally, large-scale regeneration is frequently of a mixed-use
nature, which also diversifies risk into different market sectors.
Curzon Park, Birmingham