Intelligent Land Valuation

Simon Perry - Principal Consultant & Rachel Lambert - Consultant

Is there such a thing as an undevelopable site?

There are a wide range of factors which affect the development potential of sites but with increasingly sophisticated tools and measures at our disposal, difficult sites are becoming more viable. This fact, coupled with the renewed competition for premium development sites, means that it is now more important than ever that developers have a fundamental understanding of the constraints, threats and opportunities of prospective sites. These factors will impact the development potential of the land and a proper understanding of these at acquisition stage is therefore highly advantageous.

Quantifying and managing the opportunities and constraints faced by a development can broadly be broken down into four phases (these have been mapped and presented here below).  These are:

1. Development purpose

The aspirations and needs for the proposed development site must be understood and the associated costs must be considered, along with the market it is intended to serve. 

2. Development Opportunities, Threats and Constraints

Once the aspirations for a development on the site are understood it is essential that an understanding of the threats and constraints (which may affect the viability of the development) along with the opportunities (which may assist) be appraised. These are generally centred on the following areas:

Environment:

• Is the site accessible?
• Are there any utilities that affect the ability of the site to be developed?
• Is the site located next to a main road or other extraneous noise source which will require mitigation?
• Are there underlying contaminated land issues?
• Is the site at risk of flooding?
• Are there any ecological features which may hinder development?
• Are there ecological and landscape features that could be used to make the development more attractive?

Planning:

• Is the development in line with policy?
• What is the political appetite for development on this site?
• Does this development meet national and local needs?

Community:

• Do the local community want this development?
• Is this land valued by the local community?
• Will the development bring local benefits?

3. Constraints management

By identifying the constraints it is possible to plan for the management of these issues and to understand the financial implications.  It also enables a strategic assessment of how well the land fits within a wider development portfolio.

4. Maximise opportunities

As well as constraints, understanding the opportunities enables development value to be maximised by ensuring the opportunities are fully realised.

Informed purchasing can be achieved through these steps. Difficult sites can be developed as long as the opportunities, constraints and issues are understood, although these sites in the final analysis may not appeal to all. Even sites which on the face of it appear to be simple can become problematic if proper analysis is not done at the earliest opportunity. Effective planning at the acquisition stage minimises the probability of nasty surprises later on in the programme and ensures opportunities are maximised and realised at an early stage. 

Build costs going through the roof...

Ben Harris - Technical Director

The recovery is bringing its own challenges. As the market picks up the development opportunities increase but everyone wants to build at the same time. Costs are increasing as the market adjusts to new conditions and it leaves us looking at the price of land in a different light. These pressures are greatest in the South East with London topping the chart of most expensive places to build in the world [1]. A skills shortage may slow the growth of the sector but what can be done to keep developments on track?

Tightening up on material and resource costs has helped many to maintain margin and the use of more efficient building techniques not only reduces material use but can also reduce onsite labour. To make the most out of sites and the talent in the industry do we need to rethink how and what we build?

Planning how we use materials and how their use affects programme and budget have been common in large infrastructure projects for a number of years and the savings are significant. Off-site construction and management plans for materials, carbon, waste and water have all contributed to lower costs and are now common in value management. After getting over the initial hump of implementing BIM, the projects that use it are also seeing savings, particularly in early clash detection.

Often it is left to the contractor to kick off these techniques to manage their own costs. Could more developers make use of these tools to make more out of their sites? Instead of tucking in a wall here or reducing a quality specification there could we revisit the design completely? What if, from the outset, we looked at the development from a focus of low construction cost brought about by reducing time on site, using higher value techniques and minimising the use of materials?

Resource Management Planning is an effective way to engage the whole supply chain in using resources efficiently and saving cost. Housing and commercial developments can expect to realise a cost benefit of up to 2% [2].by taking this approach. 

If you would like to reduce the cost and environmental impact of your resources, speak to our Technical Director, Ben Harris on 0207 394 3700.

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[1] http://www.arcadis.com/Content/ArcadisGlobal/Docs/publications/Research/9110_International_Cost_Construction_Report_FINAL_WEB.pdf

[2] WRAP Cost Benefit Analysis

MIPIM - The True Survival Guide

James While - Account Director

Turn the clock back only a few years and stories of excess and indulgence on the French Riviera are stuff that would make some rugby tours look like a tea party.

As with all these things however, many, not all, of these fables were apocryphal; handed down from generation to generation of developer and embellished each successive year with another jewel of dubious veracity.

2009 was a watershed for many of us in our behemoth industry. Crashing stocks, bank uncertainty and the evaporation of liquidity conspired to turn the thriving MIPIM legend into a beachfront as bare as an icy Blackpool in January.

However, as with all of the best slimming regimes, MIPIM emerged the other side, leaner, fitter for purpose and hungry for action.

Focus is the key word; one grain of wisdom replacing a myriad of excess, like rice versus confetti, and, if you’re taking the trip down, embrace that focus. Our advice is be prepared, concise, purposeful and know why you’re there.

The biggest pitfalls are gametes of meaningless appointments, fertilised with a good degree of Apprentice-inspired irrelevant sales-speak; language that would have you fired by Lord Sugar before Nick Hewar could even frown.

So, when faced with that chance to pitch your elevator (pun intended) look at it from the client side; think about what they NEED, the first, second and last principle of any form of selling.

Here’s Temple’s view on how to approach this; 

1. Tell your client why what you do works.

Know your product and portfolio; show examples and schemes that provided clever solutions to difficult development problems. And tell them how you worked it out and what the benefit was. They want to know how you think first and then what your schemes look like afterwards. How you think is what makes you different from other consultants. Your projects are the result of someone else’s brief.

2. Don’t tell them you do everything.

Please don’t tell them you’re a Masterplanner when all you have in your portfolio of built projects is residential developments. You might have the skills, but they will be very unlikely to hire you to masterplan a 20-acre site if you can’t show them a project you have already done. Be honest. Pitch to work on a job you can show you can do. Get to know your client and grow your work that way.

3. Show  good pictures and tell a story!

Don’t show plans or black and white elevations. If it’s all you've got, then you should have invested in some decent renders or CGIs. Your clients are only human; seduce them by beautiful pictures that show benefit - both esoteric and commercial; if you’re having a discussion about technical detail and it would help to pore over a plan, bring one as a backup. Even worse are hugely detailed slides, mostly about sustainability systems showing tree, sun and cloud symbols, arrows, flow charts and statistics. Impenetrable, boring and something best left to the detailers.

4. Talk about people.

Architecture and property development is only about one thing. People. How are they going to live, work and play in the schemes we design. How are places going to be economically and socially sustainable for the people who live in them? What will they enjoy about what we design? Tell your client about the people who are going to be their customers. Without people there is no need for property.

5. Do your research before you come.

Your clients are specialist, mixed-use regeneration developers. It says so on their website, right at the top. They won’t be interested in resi conversions, sheds, hospitals or country houses. So don’t waste your time either showing those things or going to see them if that’s what you specialize in. You would spend your time so much more profitably with another developer who does what you do.

Having said all of the above, MIPIM is a broad church; people are there to meet, and forging relationships through the mutual pain of sandblasted  eyes and throbbing feet produces bonds that are durable.

But don’t expect commercial miracles simply by just turning up; this is about hard work and seeding capital for relationships; fertilise those seeds and cultivate the roots you put down and your following year could be something very special indeed.


Temple are heading to this year's MIPIM, find more information here. If you're interested in booking a meeting with our team, please contact; marketing@templegroup.co.uk. 

Carbon verification – Taking a leaf out of the accountant’s book

Erica Ward - Senior Consultant

Would you invest in a company based on unaudited accounts? When a company publishes its financial accounts we expect these accounts to have been fully audited and assured for accuracy. We need to have the confidence in that company and its performance. We are accordingly shocked when companies and their financial auditors get it wrong, and investments take a tumble, as recently happened when with a major UK retailer.

So why is environmental data any different? According to research commissioned by the Global Reporting Initiative and Accounting for Sustainability the majority of investors and analysts (77%) rate external assurance of ‘extra-financial’ reporting as very important or important[1].

Verification of environmental data, however, is still very much a minority activity. In 2013, fewer than 40% of UK FTSE 350 companies independently verified their organisational carbon footprint[2]. This is startling given that this group of companies should be leading the environmental disclosure agenda.

When comparing the risks of investment in otherwise similar companies, having verified data may make all the difference to an investor, and in time could have an effect on stock prices. Greater disclosure and particularly verified disclosure by environmental professionals only goes to help investors make the decision to invest. Whilst environmental reporting is still evolving, it is no longer an excuse when it comes to carbon; the general consensus on approach to undertaking a carbon footprint coupled with international standards (e.g. ISO 14064) enable us to compare organisations directly if their reporting mechanisms comply and are verified. In a similar way, waste and water reporting have also become more standardised.

Now that carbon and other environmental reporting have grown up as it were, the benefits of verification are clear. It means internal decisions-makers can take long term environmental risks into account and be confident that they are responding to the most important risks for their business. Today’s increasingly sceptical investors will also have the assurance that disclosures of environmental data can be confidently relied on when they analyse the impact on value creation and risk. Verification of emissions reductions and other improvements help create certainty regarding progress against targets, whether they are for an organisation or an individual project.

We’d be interested to hear your views and experiences of non-financial verification; if you’d like to get in touch please contact Martin Gibson on 0207 394 3700.

[1] Radley Yeldar (commissioned by Global Reporting Initiative & Accounting for Sustainability), 2012, The value of extra-financial disclosure: What investors and analysts said.

[2] Figure based on 52% of the 260 FTSE 350 companies that disclosed under CDP, from: Carbon Disclosure Project, 2013, Are UK companies prepared for the international impacts of climate change?

A Turquoise Thames?

Stephen Glenny - Consultant

The Thames has been many colours over the years, but can it be turquoise?

Temple recently discussed using the Thames more effectively.In this blog, we use our concept of Turquoise Cities to assess TfL and the Mayor of London’s River Action Plan. The Turquoise Cities concept addresses the blend of four elements needed for a sustainable city: liveability & usability, water & climate resilience, harnessing environmental systems and being innovation enabled.  We previously applied this concept to assess London's draft Infrastructure Plan for 2050.

Overview of the River Action Plan

The River Action Plan for the Thames was published in February 2013. It outlined improvements to river services between now and 2020 with the aim of increasing passenger journeys to 12 million and ensuring that Londoners and visitors make the most of the river. £10m has been allocated for delivery of the actions (approximately £1.4m a year).

The plan gives actions in four key areas: better piers; better information and integration; better promotion and better partnership working. Three main delivery phases are identified:

• 2013-2014: improved pier management, signage and integration plus new promotional activity;

• 2014-2015: completion of physical works to expand the capacity of key piers; and

• Beyond 2015: occupation of new riverside developments.

Initial signs for increasing the use of the Thames for transport are good: there were record passenger numbers in 2013/14 and significant growth in both River Bus and River Tours services. However, what is the longer-term future likely to hold?

The Turquoise City Assessment

So is the River Action Plan strong on strategic intent and deliverability across the four elements needed for a Turquoise city? The overall rating is illustrated on the grid below and it shows that the strategic intent could be much stronger in all four elements. It also suggests that the actions needed to address water and climate resilience and the harnessing of environmental systems will be hard to deliver. 

Let’s take each area in turn.

Liveable & Usable: Making places more enjoyable, safe and inviting to live and improving quality of life.

The River Action Plan clearly states that it wants to improve piers as places for people to enjoy, attracting more visitors to the riverside and onto boats. The plan gives actions such as exploring “high-quality public realms including small river plazas, seating, weather protection and other such facilities that make piers more attractive as public places.”

It is also recognised that better information and integration contribute to the user experience. To address this, plans are afoot for seamless interchanges through clear wayfinding and signage of routes between piers and other public transport networks.

Discussion of how the Thames and the riverbanks could be enhanced beyond the piers is not covered, as the document is purely focused on transport, limiting the potential actions. Recent plans have been released by the River Cycleway Consortium for an 8-mile floating bicycle path on the Thames: Though the benefits of this scheme compared to the level of investment involved may be questioned, proponents would argue that London needs iconic ideas such as this to ensure it remains a world city.

A similar level of ambition could be included with this action plan. As the plan acknowledges, making the riverside an enjoyable environment and destination for locals and visitors will help to grow the use of the Thames for transport.

Water and Climate Resilient: Reducing vulnerability of people, infrastructure and assets to extreme weather, exacerbated by climate change.

Very little mention is made of climate resilience in the plan. This may be because the Thames benefits from the Thames barrier, which is predicted to provide sufficient protection from tidal surges and river flooding until at least 2070. Putting aside nightmare scenarios of extreme flooding, increasing the use of the Thames could help to alleviate the impacts of climate change on other public transport; it could act as a useful alternative transport route if other methods are affected by localised flash flooding or overheating.

Harnessing environmental systems: Use of Green and Blue infrastructure for provision of ecosystems services in an urban setting.

While the use of the Thames for transport is a form of harnessing an environmental system, the idea of including environmental systems and the services they provide is not included in the plan. The inclusion of Green Infrastructure and Sustainable Urban Drainage within designs for pier and nearby enhancements would be a good place to start. These provide rainwater attenuation, biodiversity in an urban environment and local air quality benefits.

Incorporating environmental systems into the infrastructure of the Thames has been in the news recently with plans for a ’garden bridge’ spanning the river near Temple station.

Innovation Enabled: System of systems approach to design and integration of connected assets and infrastructure.

The plan’s discussion of innovation covers wave-and-pay payment technology; integration with other modes of transport, such as hire bikes; and provision of real time information for passengers termed ‘iBoat’. These data will be made available for third party developers to use for app development.

The plan also mentions that TfL will encourage boat operators to adopt eco-driving techniques and explore innovative technology, such as hybrid engines to reduce emissions.

The actions covered in the plan are a good start but could be more ambitious to help deliver an innovation enabled transport system. For example, incorporating innovations such as renewables (e.g. Solar PV) into the piers and boats would reduce emissions, operating costs and make river transport more affordable, while greater application of an “internet of things” approach could provide further benefits.

Only when river transport services are fully integrated with the rest of London’s transport system will they be able to realise their full potential. This will require more strategic intent across wider systems than a piers and passenger numbers focus.

Summary

Would a broader River Action Plan, including transport as a key element, be a better way to provide leadership on the use of the Thames?

This Turquoise Cities assessment is intended to help focus productive dialogue on how the plan could achieve even more. The remit of the current plan is necessarily narrow in focus: produced by TfL, it focuses on transport improvements only. There is certainly a case for including this plan as part of a more ambitious River Thames Action Plan, looking at what can be achieved on and alongside the Thames to make it an innovative, usable, resilient and integrated part of the city. The success of events such as the Totally Thames Festival demonstrates that there is an appetite for making the most of the Thames. If the River Action Plan can help to harness this, then maybe one day we could see a metaphorical Turquoise Thames bustling with Londoners and visitors on its boats as well as its banks.

Building relationships to deliver projects

Tanya Burdett - Environment, Planning and Community Engagement Manager / Temple Associate and Vikki Hilton - Director, Hilton Associates

Successful engagement requires many things, but ultimately it’s about building relationships, trust and respect. To achieve this, we need to engage in a way that is clear and consistent; accessible, timely, shows care and allows for feedback. Our communications should also be relevant, comprehensive and truthful. This may sound a lot to take into consideration, but worthwhile if one is to forge strong relationships with our ‘community’, whatever that community may look like. 

These have been key success elements for most projects, large and small, that we, as Licensed Trainers in the International Association for Public Participation (IAP2) Foundations course, have been involved in throughout our collective 50 years of experience. In many cases communities can be treated as a nuisance factor. Yet flip that view around, and one can see some real benefits to engagement. Numerous studies by UK organisations (such as Involve) and others (for example the Kettering Foundation), provide evidence of the benefits (and costs). All we need to do is take some time to get to know the communities we work within and our key stakeholders who we rely on for delivery. 

There have been numerous times when working with engineers, designers, scientists, technical professionals, project managers and builders that the discussion of ‘building’ comes up. We’re all building something – some, tangible physical infrastructure; others, technical solutions and scientific programmes that advance our health care, environment and economy. When discussing objectives of any project and what we as a project team want to achieve as public participation practitioners, we will often talk about ‘building’ relationships. 

Ultimately we are  striving to provide quality – in engagement, training, capacity building, and in sharing best practice. IAP2 is a vehicle for this through the annual Core Values awards issued to demonstrate and celebrate good practice. 

We'd welcome your views and experiences on building relationships with stakeholders in the comments box below, for example: 

• Can we really build meaningful relationships with stakeholders that prevent issues arising in the development process?
• Does ignoring your stakeholders really save you money in the long run?
• How can you involve stakeholders in a meaningful way without adding vast amounts of time and cost to your delivery programme?

Collectively Tanya and Vikki bring together a wealth of experience in promoting effective engagement strategies, from working on large infrastructure projects with government organisations and the private sector in the UK and overseas as well as with NGO’s and marginalised groups. Come join them in learning more about effective engagement strategies in the IAP2 training offered in London 1-5 December. 

Developers face changes in air quality policy

Alaric Lester - Principal Consultant and Enan Keogh - Senior Consultant

The Mayor of London has been busy on air quality this year, not least because of the start of infraction proceedings by the European Commission. Also aside from TfL’s consultation on proposals for a London Ultra-Low Emission Zone and Boris’s making an appearance at the Environmental Audit Committee in September, the Mayor has published two supplementary planning guidance (SPG) documents that may have substantial implications for developers.

Sustainable Design and Construction

The Sustainable Design and Construction SPG, published in April, includes guidance that formalises the requirement for developments with more than ten dwellings to be air-quality-neutral. For some years there has been a concern that, while smaller developments do not themselves lead to significant air quality effects, incremental additions to the air pollution load serve to delay wider improvements in air quality. There are now emissions benchmarks in the SPG that must be met, covering fixed plant (boilers and CHP) and road traffic associated with the development.

The air-quality-neutral assessments themselves are straightforward and do not add much cost to an air quality assessment or environmental statement chapter. Our experience so far suggests that mitigation of emissions that do not meet air-quality-neutral benchmarks will prove more problematic. Even with ultra-low-NO_x boilers or tight controls on private car use, developments may still find themselves exceeding benchmarks. In one recent case, even though transport emissions just exceeded the benchmark and were based on a transport assessment that combined a number of worst-case assumptions, the Local Planning Authority (LPA) still wanted additional mitigation. We anticipate additional effort in negotiating appropriate planning conditions that will be acceptable to the LPA and the developer.

Dust and Emissions

Also published in 2014 was an SPG on the Control of Dust and Emissions During Construction and Demolition. This document builds on the GLA/ London Councils 2006 best practice guidance, The control of dust and emissions from construction and demolition and BRE’s Control of dust from construction and demolition activities. It also draws heavily on the Institute of Air Quality Management’s 2014 Guidance on the Assessment of Dust from Demolition and Construction. The SPG will influence construction practices in London.

Of immediate concern for developers in London, the GLA is seeking to control emissions from non-road mobile machinery. Major developments using non-road mobile plant machinery will have to meet emissions standards as defined in EU Directive 97/68/EC.

From 1^st September 2015, in Greater London non-road mobile plant within specified power outputs will be required to meet Stage IIIA of the Directive as a minimum, and Stage IIIB within the Central Activity Zone or Canary Wharf. This means that most contractors’ plant will need replacing or to be retrofitted with emissions abatement equipment which means higher costs.

There is, at least, some concession for smaller operators; in outer London, emission standards will only apply to major developments. These emissions standards will apply to all construction projects, regardless of whether they started in advance of this date. The GLA recommends that developers begin immediately to put processes in place to ensure that their supply chain can meet the standards. It is acknowledged that it may be currently cost-prohibitive for some plant to meet the standards and the GLA will publish a list of plant that will, for a time, be exempt from the policy.

From the 1^st September 2020, the emissions standards will apply to all construction sites in London, as well as being more stringent than the 2015 requirements. Developments in Greater London will need to achieve Stage IIIB standards, while those in the Central Activity Zone and Canary Wharf will be required to meet Stage IV as a minimum.

In addition, the SPG highlights the introduction of an ultra-low emissions zone in Central London in 2020. This will require all vehicles to be either zero or ultra-low emission and will affect any construction vehicles accessing sites.

Conclusions

With adequate preparation, these SPGs will be perfectly manageable for developers and their contractors. They will though mean some additional cost and effort.  Leading companies in the sectors affected will plan ahead and also take the opportunity to promote and espouse their developments’ green credentials.

For more information on Temple's Air Quality services, please contact Alaric Lester at alaric.lester@templegroup.co.uk.