Combining publicly-owned land with private housebuilder expertise has long been hailed as a way to ‘fix’ London’s housing crisis.
And with around 1,300 sites of more than 20 acres in public ownership that could conceivably be brought forward for residential development across the capital, there’s serious potential for tens of thousands of new homes to be built in partnership with the private sector.
There are already many successful examples of public/private partnerships delivering much-needed schemes in London.
To help crystalise the major factors involved in such projects, we’ve spoken to key stakeholders from Transport for London (TfL), the NHS, and private developer Countryside. Their more detailed observations can be read here, but, in summary, successful ventures call for:
- Transparency
- Equality
- Collaboration
- A clear understanding of objectives
- Patience – these partnerships are often long-term plays
The right partner for the job
Choosing the right partner is crucial and requires a thorough understanding of what each party needs to achieve. Peter Elliott, Head of Property Development at TfL, comments: “Different sites mean different things to different parties. Larger more complex sites will suitsome private operators whereas smaller sites of 150-200 homes will attract a different operator with different objectives.
“On those large strategic sites we want to work with partners who are pragmatic and see us and the partnership as equals. Marriage value for instance can be split up in many ways. We don’t want to do it on a purely site area. Let’s do this in a transparent way where it is win-win for all parties and we share the benefits equally.”
It’s the same for the NHS. Bruce Duncan, Estate Modernisation Programme Director at the NHS, says: “When looking for partners we need those who are going to be open and transparent. We know we’re not the experts in property and we understand developers operate within a competitive commercial environment. For partnerships to work, they need to be collaborative.”
Playing to each other’s strengths
Partnerships make sense, allowing public bodies to capitalise on specialist skills and know-how.
Kate Ives, Strategic Director at Countryside, one of the capital’s biggest developers, is clear: “We know what sells, we know what the market demands, we know how to design schemesand get planning and we know how to make them viable and last the test of time. Crucially, we also know how to make ‘places’, for both new residents and existing local communities.”
Risk-reward
Funded by the taxpayer, public sector bodies will have a very different appetite to risk than the private sector.
One way of better sharing risk as well as arguably greater rewards could be through the joint venture model, as opposed to a development agreement. These are essentially more flexible and can be tweaked if policies and the market change.
The whole is greater than the sum of its parts
Marriage value, whereby both public and private landowners can pool together adjoining land ownerships, can create real value with a more holistic masterplan and genuine placemaking.
An example can be seen in TfL’s current plans for Edgware where they have partnered with Ballymore; combining land ownerships has more than doubled the residential capacity of the scheme and massively increased the social value.
The benefits of working in partnership seem clear. Large-scale regeneration where both the public and private sectors are working in unison will benefit both parties. More than that, they will benefit London and its communities.
Reasons such as public sector governance and the number of stakeholders involved mean partnerships often do take a long time to come to fruition. For the sake of London’s future housing delivery, arguably the best time to enter into a partnership was 10 years ago. The second-best time is now.
