Multi-Site Development Joint Venture – Strategic, Financial & Procurement Support
Hertfordshire County Council’s Medium-Term Financial Strategy was projecting significant financial challenges over the medium term. As a result, the Council wanted to look at its asset base as a way to generate sustainable long-term financial returns. Historically, the Council only really utilised its assets to generate capital receipts by disposing of land and assets to developers with outline planning permission. However, they were keen to review ways to secure greater financial returns from these assets, whilst also seeking to kickstart housing delivery across the County. 31ten was therefore commissioned to support the Council in achieving this goal.
The Role
We were commissioned by the Council to provide strategic and financial advice in reviewing the potential delivery options to achieve these goals. Initially we worked in partnership with the Council to review an array of solutions ranging from self-development to partnership approaches and then worked together with Carter Jonas to focus on specific assets in their portfolio to exemplify how these options would work and the risk vs. reward profile of the solutions.
As part of this work, we provided strategic, asset and financial support, including developing an integrated financial model, based on a variety of sites, to show the financial implications for the Council of each approach. We led an options appraisal of these to develop a preferred approach, undertook soft market testing and set out the preferred procurement approach before taking the opportunity to market.
We then led the procurement of a Joint Venture partner for the Council through a Competitive Dialogue process. The partner would work together with the Council to identify opportunities from its asset portfolio and then co-fund, and develop appropriate schemes on the sites and then either secure appropriate sales or operate the resultants units. This work entailed developing the approach to the procurement, developing the strategic procurement and financial tools in partnership with the Council and its other advisors, and to support it in undertaking dialogue meetings through Detailed Solutions and Final Tender stages.
Key Outcomes
In early 2018, the Council selected its preferred partner, Morgan Sindall Investments Limited, for the Joint Venture. In addition, based on our advice alongside legal advisors, Sharpe Pritchard, the Council also set up a wholly-owned company, Herts Living Ltd, with the purpose of buying, developing and selling real estate as the JV partner. The partnership, named Chalkdene Developments has now commenced and has delivered its first sites.
