Investment Course Work

Redevelopment of Goldsmiths Avenue land, PortsmouthRedevelopment of the land to the south of Goldsmiths Avenue, Portsmouth

Student Numbers: 388472 & 400731

2010

388472 &400731 Portsmouth University

1/1/2010

Introduction:

The purpose of this report is to advise the client who wishes to purchase a site south of Goldsmiths Avenue and develop the land for residential and commercial purposes.

The Clients intentions at the end of the project are to sell the residential properties and retain the commercial properties as an investment. The land to be developed is south of Goldsmiths Avenue approximately 0.474 Hectares (Gross) in size however we assumed that the developmental area should be 5% less therefore the area to be developed is 0.450 Hectares (Net).

The report will cover the current use of the properties occupied on the site and the mixed ownership of the site will also be taken into consideration. Issues that will affect the likelihood of the project going ahead will also be identified and described in the report, such as the planning application stage.

The report will also assist the client in how the land should be developed, it will show plans of how the site could possibly be laid out, and what types of buildings could be used in the development of the site.

Location:

The Plot is 227 – 247 Goldsmiths Avenue Portsmouth, and is named Site 64 in the Portsmouth City Local Plan.

The Land is situated opposite Fratton train station along Goldsmith’s Avenue, in Portsmouth; it is in close proximity to other main facilities such as a secondary school, bus stop and town centre. The site is located on one of the main exit routes from Portsmouth town centre, leading to the M27 Motorway. Therefore it is in a good location for residential and commercial property as it will be easy for workers to commute too and from the area.

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Background:

Goldsmiths avenue was selected, as the highest priority area in Portsmouth to be redeveloped as voted by the public. Details of this can be found in the appendix. (National Brownfield Pilot Project, Goldsmiths Avenue).

The site is currently a Brownfield site “Brownfield’s are abandoned, idled, or under-used industrial and commercial facilities where expansion or redevelopment is complicated by real or perceived environmental contamination” (Brownfield site. (n.d.)).

The current buildings on the site are visually unattractive and in very poor condition, they also back onto residential properties. Therefore due to its run down appearance and poor condition Portsmouth City Council wishes the land to be redeveloped and rejuvenated.

The site itself is 0.474 hectares (Gross) and the developmental area is 0.450 hectares (Net). The land has ‘a variety of uses, including scrap yard, vehicle repair garage, snooker club / gym, taxi office, timber yard, shops and three dwellings.’

However we have assumed that the local authority; Portsmouth City Council will find alternative premises to the current occupiers, therefore no compensation costs will be paid for by the developers.

Portsmouth city council would like to see the ‘Land to the south of Goldsmith Avenue allocated for a comprehensive redevelopment scheme comprising housing, employment, other commercial uses or a mixture of these, and including an area of amenity open space.’ This is because ‘Central Southsea is one of the most densely populated areas in Portsmouth and less than 1% of the ward is publicly accessible open space.’ (CS2 Goldsmith Avenue/Fawcett Road Urban Priority Area. (n.d.).) In spite of being available for redevelopment since 1984 in the Fratton Centre District Plan no proposals have been put forward as yet.

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Proposed scheme:

The proposal is to develop the land for mixed-use, thus to offer commercial and residential properties. The development will be aesthetically pleasing with a lot of green space which is a requirement by Portsmouth City council.

Therefore we have decided to include 3 retail units consisting of:

1. 1 small supermarket,

2. 1 mid-sized hotel; and

3. 1 office unit

The residential properties will consist of 24 flats:

1. 6 Studio flats

2. 12 One bed flats; and

3. 6 Two bed flats

The site will also be landscaped, and the playground near the site will be redeveloped and updated.

Parking facilities for the site will be situated underneath the Residential and Hotel developments, however parking for the small Supermarket and Offices will be situated at the rear of the building so that the high construction is not in close proximity to the surrounding residents. Allow for easy and quick access.

Further details of the scheme can be found in Local property market research (further into this report).

Areas of Buildings:

Gross areas of buildings etc

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Development risks associated with the scheme:

We have assumed that Portsmouth City Council will find alternative premises for the current occupiers. Therefore the main complications of the site are the site clearance and decontamination works that need to be carried out.

The site clearance will be an extensive job, due to the former uses of the site; therefore we have assumed that they will cost £100,000.

Another factor that will affect the project is the decontamination works that need to be carried out as a result of the sites previous use. It is therefore advisable that “Independent investigation of the sites history and the possible impact of former activities on the status of the subsurface soils and groundwater’ are done ‘prior to acquisition”. (Brownfield Land

Development Information. (n.d.).)

Therefore we have assumed that the decontamination of the land will cost £40,000. Details of this are found in the appendix.

Another issue which may put off development is the requirement by the council for a green space in the development. This will reduce possible profits which may make the development less viable to developers. This may be a key factor in the current economic climate with uncertainty in the UK economy, which may reduce the likelihood of development.

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Planning application issues:

To ensure that the planning application stage runs smoothly and public opinion has been aired, a pre application stage would be advised to ensure all information is provided. Since this is a large development an appointment will be required for the council to give advice on the development. Information such as drawings and plans will be required by the council and they will provide ‘an experienced Planning Officer’ (Major Planning Application. (n.d.).) and other professionals when required, to help advise the planned development.

Other information that will be required include (among other things). ‘The contact name and address of the person dealing with your legal matters, evidence of title for the site (if registered, supply Official Copy of Register Entries and Title Plan).’ The council also require ‘All persons having an interest in the site an undertaking to pay the Council’s legal costs in connection with the preparation of the legal agreement, irrespective of whether completed.’ (Major Planning Application. (n.d.).)

An idea of whether the application will be accepted can be given 5-7 weeks after the application is registered. Obviously for planning permission to be granted the building regulations must be met, and if they are not building control will enforce the building regulations.

Other planning application issues that may affect the development include a sustainability appraisal. This is in place to ensure sustainable development of the Portsmouth area, and to improve job opportunities for the local population. ‘Social, economic or environmental effects of the policies in the planning documents on the local area.’ Local development scheme revised July 2007. Are taken into account where issues such as renewable energy, flood risk, air quality, employment land, and declining town centres are covered. According to GUIDE TO FEES FOR APPLICATION (FROM 6TH APRIL 2008) the costs of planning application for this type of development will be ‘£335 for each 0.1 ha of the site area’ http://www.portsmouth.gov.uk/living/773.html therefore planning permission costs should be roughly £2010.

In the planning application stage the buildings risk to flooding will need be assessed prior to approval, as the site lies in zone 1. Portsmouth strategic housing land availability scheme September 2009. P. 2

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Development appraisal:

The residual method is used to determine the site value of a piece of land that you wish to develop on when there is no comparable evidence available in assisting a valuation. By finding out the land value it helps the developer work out ‘feasibility of a proposed scheme’. (Blackledge, 2009, p. 269). In basic terms the method works by subtracting all of the cost of developing (including a profit) from the Market value once the project is completed. The costs of developing may include, compensation being paid to current occupiers of the site so they can vacate the site. Construction costs, and professionals fees for architects, quantity surveyors etc.

6.1 The Process:

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6.2 Local property market research:

Residential:

We have decided to include a premium on the residential property sale prices due to their prime location – opposite Fratton train station, giving good transport links to commuters.

Therefore the sale prices we will be using for our properties are as follows:

Property Type Average Price Price with 5% premiumNew Studio Flats £75,125.00 £78,881.25New 1 Bed Flats £148,488.00 £155,912.40New 2 Bed Flats £240,487.00 £252,511.35

Details of our property comparables can be found in the appendix. Average Prices were gathered from (New homes in Portsmouth & area guide).

Retail:

Offices:

Leisure (Hotel):

According to the Portsmouth Hotel Futures – Summary Report October 2007 (found in the appendix) the local economy would benefit from extra hotels, “Particularly if a new larger football stadium is built”. (Hotel Solutions The Hotel Development Consultancy, 2007). Therefore an increase in hotels in the area will provide extra accommodation to visiting supporters.

Due to the layout and size of the site, we have decided not to build a conference centre in the hotel complex and have instead decided to dedicate the hotel primarily for low budget customers.

However a conference centre would be supported by the city council because “The possible development of the city as a conference destination if aspirations for a purpose-built conference centre are realised, all points towards continued growth in demand for hotel accommodation in the city in the next 20 years” however we believe the site is too small to offer facilities such as this.

Due to the plot of land being close to Fratton train station and Portsmouth football stadium we have decided to include a small low budget hotel in the development proposal due to a lack of them and increased needs in the Portsmouth area.

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6.3 Development costs:

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6.4 Assumptions:

Due to the nature of the proposal and the council’s enthusiasm to get the Brownfield redeveloped we have had to make some assumptions in the project.

The following assumptions have been made in the development appraisal:

The property will be purchased freehold.

Site clearance costs will be £100,000

Decontamination costs will be £40,000

The local authority will find alternative premises to the existing occupiers therefore no compensation will have to be paid.

The sale prices of the residential properties will have a 5% premium on the average house prices due to them being in close proximity to Fratton train station. (New homes in Portsmouth & area guide).

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7. Conclusion:

8. Recommendations:

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Bibliography:

Books:

Baden-Powell, C., Hetreed, J. & Ross, A. (2008). Architects pocket book. Hungary. Elsevier Architectural Press ltd.

Bichard, A., Styles, K. (2008). Working drawings book. Elsevier Architectural Press ltd.

Blackledge, M. (2009). introducing property valuation. Abingdon: Routeledge.

La Salle, L. (2007). The glossary of property terms (2nd ed.). Malta: Progress Press Co. Ltd.

Osbourn, D. (1994) Mitchell’s Building Series. Introduction to building. Singapore. Longman Singapore Publishers Ltd.

Websites:

Brownfield Land Development Information. (n.d.). Retrieved December 22, 2009, from UK Land Directory: http://www.uklanddirectory.org.uk/brownfield.asp

CS2 Goldsmith Avenue/Fawcett Road Urban Priority Area. (n.d.). Retrieved December 22, 2009, from Portsmouth City Council: http://www.portsmouth.gov.uk/living/7535.html

Hotel Solutions The Hotel Development Consultancy. (2007). Portsmouth Hotel Futures. Portsmouth: Hotel Solutions.

Major Planning Application. (n.d.). Retrieved December 22, 2009, from Portsmouth City Council: http://www.portsmouth.gov.uk/living/17197.html

National Brownfield Strategy. (n.d.). Retrieved December 22, 2009, from English Partnerships The National Regeneration Agency: http://www.englishpartnerships.co.uk/brownfieldstrategy.htm

New homes in Portsmouth & area guide. (n.d.). Retrieved Jamuary 5, 2010, from findanewhome.com: http://www.findanewhome.com/south-east-england/hampshire/portsmouth/area-information.fap

New homes in Portsmouth & area guide. (n.d.). Retrieved Jamuary 5, 2010, from findanewhome.com: http://www.findanewhome.com/south-east-england/hampshire/portsmouth/area-information.fap

Online Dictionaries:

Brownfield site. (n.d.) Wikipedia.org. (2005). Retrieved December 22 2009 from http://encyclopedia.thefreedictionary.com/brownfield+site

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