Manor Road Quarter follows on the Rathbone Market mixed use scheme ECF delivered across the road in Canning Town. Duncan Cumberland said: “Our first trip down there, well over a decade ago, Newham council's regeneration team was sat in a Portacabin opposite the tube station. It was proper regeneration. Canning Town is the sort of long-term challenge that ECF was set up for – because we can work on a lower margin. We started the first phase of Rathbone Market when I couldn't get a mortgage valuation of over £340,000 pounds for a private flat.
We could still see the value there. It just required some effective interventions. Various partners deferred their returns and they've had those returns back two-fold for allowing us to get on with things. It was in 2010, we got that initial money, and if you go down to Canning Town now there are plenty of brilliant things happening.”
He added that whereas a few years ago, ECF-sized schemes were losing out on funding to (for example) relief road schemes with the potential for thousands of units, things are becoming more focused: “Homes England are looking to do much, much more in terms of our towns and cities.”
Although much of the brownfield debate centres around large urban sites, we shouldn’t forget that smaller towns and even rural areas also have such sites, said Rachel Laver: “You can't just keep just putting the investment into urban areas. We need thriving rural communities, which will need infrastructure because we haven't had a penny out of the rail improvements. We've got loads of potential because we’ve got the land, we've got the potential to do something about net-zero.
In plenty of rural or smaller city areas, we've got plenty of old industrial areas that need investing in, but at the moment the finances don't stack up, particularly for affordable homes.
“This is where we need government intervention, but it isn't all about just giving money away - because I do think loan funding works phenomenally well. You just need to prime the schemes to de-risk them. If everything pans out, you can recycle outputs into other schemes. So, we need the flexibility to be able to do that.”
Timing and projects sequencing is a tricky hurdle for private developers. When we look at multi-phase developments, we don't try and engage in phase two, until such time as we've got phase one locked down. The whole point about brownfield is actually to control the land and stages and the cash flow and suddenly, we've got a much better, viable scheme.
Rachel Laver commented: “I do think authorities should invest in decent pipelines, but costs are changing all the time as well. We’ve had our hands bitten on ‘shovel-ready’ projects, where authorities have just kept coming back to us with ‘it’s cost quite a bit more’ and it’s just got delayed and delayed and costs have gone through the roof. Authorities need to be realistic.”
Returning to the question of land values, the figure is only a small element in the equation, said Duncan Cumberland. “In the end, the challenge for our Manor Road Quarter scheme came down to working with Morgan Sindall about getting to the right construction value. That was by far the biggest chunk in the appraisal. So, it wasn't about going and bidding a land value because that land was owned by the Greater London Authority.”
