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The private and public sectors are becoming increasingly aligned, and working together, when it comes to running their estates more efficiently. The by-product is not just a cost saving, but potential space for much needed housing too.

Lay of the land

As the end of this month approaches, the government’s Public Land for Housing Programme is set to miss the target it set in 2015 for releasing enough land to build 160,000 homes by March 2020. According to the latest data release, the land sold by departments amounts to 48,000 homes – well short of what was hoped would raise £5bn in capital receipts.

Some of the challenges have included the very nature of land disposals such as planning and environmental concerns. Changing operational requirements and land being repurposed for other uses have also been cited as key factors.

Identifying surplus space shouldn’t be an issue going forward. This programme only involved the five largest land-owning departments. It’s likely more government departments will be asked to review parts of their estates to identify usable sites or making better use of public assets – for instance by assessing the viability of repurposing of car parking.

According to figures from the Cabinet Office’s latest ‘State of the Estate’ report, there was a ninth consecutive yearly reduction in the size of the central estate by 3.6% – the equivalent of thirty nine football pitches. The opportunities for development are there if the initial hurdles can be cleared.

Pivotal partnerships

There are signs that public sector bodies are increasingly willing to forge partnerships with the private sector in order to bring sites to the market and commence residential projects.

One noteworthy agreement was Homes England agreeing a £150m finance package with Pocket Living. This partnership with the SME will see it start at least 1,059 affordable homes by March 2021 on small to medium sized public land sites. Another was Transport for London last year appointing Grainger as its joint venture partner in a new build-to-rent programme promising to unlock well connected TfL sites; delivering over 3,000 new homes.

While councils buying commercial property through the Public Works Loan Board has been well documented; some are going one step further and creating investment vehicles with construction and development companies. An example is Brentwood Borough Council who last year announced a £1bn partnership with Morgan Sindall – its fourth after similar deals with Bournemouth, Hertfordshire and Slough. The 50:50 joint venture will provide new homes, mixed-use developments, public spaces, commercial and leisure facilities – all on existing land held by the council.

Here too at Hollis the demand from new and existing local authority clients requiring expertise in delivering projects from start to completion, along with the asset management opportunities that follow, is there, and has seen us appointed as approved consultants on the Pagabo framework – a major national framework open for use by all public sector organisations in the UK going live next month.

While details of the budget – described by the chancellor as “the biggest programme of public investment ever” – promising £600bn on infrastructure spending over the next five years are still to follow, the indications are that private and public sector collaboration looks set to go from strength to strength.