Proposal for Belgrade City Centre Regeneration. May 2011

Transcription

1 Proposal for Belgrade City Centre Regeneration May 2011

2 The region s real estate dynamics are changing In the last 20 years: Downtown areas were neglected outside of limited historical streets and squares. Development projects moved out of town, creating large residential, office and retail schemes that are disconnected from the city centre. This reduces the vibrancy of the city centre. But as a result of the crisis: City municipalities are running tight budgets and would appreciate additional income sources. Developers are looking for ways to refocus on city centres. This is an opportunity to take advantage of these changing dynamics.

3 Developers are willing to work harder for city centres Developers will seek to overcome old challenges land costs, restitution claims, cadastre, permitting complications and traffic access, to access land with strong fundamentals location attractive to tenants and customers, flexible zoning, buildability and overall access rather than stay out in the cold.

4 Train station vicinities exhibit these strong fundamentals Because train station vicinities are: Large Central Well-connected Iconic So they can be a perfect springboard for regeneration.

5 Example One: King s Cross will deliver a mixed use real estate vision 27 unused hectares will become: 316k square metres of offices (salmon pink) 4,600 square metres of retail (bright pink) 300 hotel rooms, 650 student rooms (green) Up to 2,000 new homes & serviced apartments (mustard yellow) Over 2 billion of transport infrastructure works (greyscale)

6 The project includes green space, waterways, education and cultural outlets University of the Arts London is on site 25 hectares of open space Regent s canal Ownership: King s Cross Central Limited Partnership brings together: Argent Group PLC as developer London & Continental Railways as landowner / railway operator DHL Supply Chain as landowner

7 Example Two: Westend Budapest The site pre-development in 1997

8 Westend Budapest: after redevelopment in 1999

9 Westend Budapest: key facts USD 200m total investment 100% leased from opening with: More than 400 retail outlets 240 room Hilton hotel 20,000 square metre A Class office building 1,750 parking spaces FIABCI Excellence Award 2001 for most outstanding retail complex in the world (previous winners include Guggenheim Museum) 21 million visitors a year

10 Regeneration structures bring together public and private entities Pre-development stage: Development stage: Railway EBRD Railway City council EBRD City council Developer Urban regeneration company Urban regeneration company EBRD would like to leverage its unique position to provide expertise and mediate between public and private priorities

11 EBRD value add: a reliable partner to add expertise and a public-private bridge EBRD participation Pre-development / public Assist municipality & railway companies to execute feasibility studies, demand based strategic master planning and tender preparation Development / private Assist the tender winning developer with project financing, having already established itself as a long-term partner of the municipality & railway company

12 Steps in the pre-development stage 1. Gain preliminary commitment: From railway companies / city council to access idle equity in the form of land From city council to support due diligence and urban master planning From Mayor s office for political support for a major project 2. Establish special purpose regeneration company to carry out and hold the project work 3. Complete initial due diligence on project feasibility and land ownership / restitution claims Requires support from city council and access to land registry and cadastre. 4. Complete real estate market demand study Engage internationally recognised RE consultant (CBRE, JLL, Colliers etc) Assess current and future market demand (up to 10 years ahead) for each real estate segment (residential, retail, hotel, office, public) Develop phasing outline to match space delivery with demand Engage potential future tenants for soft pre-lease discussions

13 Steps in the pre-development stage 4. Complete land valuation Necessary to negotiate equity shares in project entity. 5. Complete concept design Can be part of integrated urban master plan or standalone, depending on project specifics Engage architectural firm with urban planning competence Include public transportation analysis as part of site project access study (tram, bus, light railway, car, pedestrian)

14 Steps in the development stage 1. Sign letter of intent with public partners Include EBRD s option to become minority shareholder in development project entity. 2. Tender for master plan development Engage top international developer to elaborate a regeneration vision based on proven real estate demand and new concept design. Include ambitious sustainability, energy efficiency and space use requirements. 3. Negotiate senior debt with tender-winning developer

15 Citywide benefits Urban regeneration projects revitalise a single area but can impact a whole city: Increased competitiveness Improved sustainability And generate funds for public partners: Dividends to shareholders Tax revenue to councils

16 Well distributed benefits Railway operator receives infrastructure renovations and dividend cash flow City council receives city centre revitalisation, real master planning, dividend and tax cash flows City residents receive an attractive and sustainable city centre Developers and investors receive access to commercially attractive land