CIH Chief Execu-ves & Leaders Conference How can housing diversify its income streams?
Background and context Soho Housing A small affordable housing business of 800 homes Established in 1970 s by local working community Operates exclusively in central London villages Stock acquired and developed with grant Small commercial property porlolio Vision To support village communi:es in central London, provide a range of affordable housing and engage with residents to improve the quality of life and life chances
2010 Issues: Disappearing grant for development Commercial porlolio suffering from voids, debt, poor management DriP from heartland loca-on and original purpose Absence of strategic property skills and focus Uncertain future Challenges: Need for secure and addi-onal income flows Need for a new development model Need to improve performance of the commercial proper-es Re- visit purpose and heartland How to achieve new revenue streams? How to facilitate?
Soho Ltd Soho Ltd launched 2011 Vehicle for Soho Housing commercial and diversified business ac-vi-es ShiP to more commercial business culture Profile raising, rela-onship building Leading new opportuni-es & developments Le[ng new discount and market tenures Commercial property management Joint ventures
Soho Ltd : branding
Next steps Review of geographical heartland, purpose and resources Strategic review of all property assets iden-fying opportuni-es Sales of non core assets recycling revenues Improve commercial property income and returns New development model Iden-fy sources of other revenues
Selec:ve sales/projects to recycle capital Clerkenwell: Vacant hostel building to be developed as 17 market flats for sale. Joint venture with United House. Cash to be recycled into new homes. Covent Garden: Low quality commercial investment sold.
New revenue projects Bloomsbury: Basement of 8,000 sq P below housing development. Poten-al for commercial le[ng to raise 100k pa.
New revenue projects Maida Vale: Proposed infill development to side and rear. Poten-al for two homes (90 sq m & 74 sq m).
New revenue projects Soho W1, proposed conversion of ground floor flats to retail units
Commercial proper-es: Inves:ng to improve revenues Charing Cross Rd, WC2 shops Crea-ng a flagship investment Shop refurbishments and enhancements Improving tenant profile Enforcing lease covenants Bringing in house management
Commercial proper-es: Before and ajer improvements Charing Cross Rd Shop refurbishments and new le[ngs
Commercial proper-es: Before and ajer improvements Charing Cross Rd Shop refurbishments and new le[ngs
Commercial proper-es: Before and ajer improvements Charing Cross Rd shops Shop fascia improvements
Leasehold blocks: Securing homes and future income Review of all leaseholds Long term protec-on of stock and revenues 90 year lease extensions (80 flats completed, 28 planned) 30 short lease flats moved from social rent to market tenures Bloomsbury: 28 flats, 40 years unexpired.
No grant Developments: Higher revenue earning model Move to discounted rent and market rent tenures Cross subsidy from mixed tenures/uses No s.106 purchases Seek unrestricted market residen-al consents New model offers greater control over tenants, tenures and rents
Developments: Higher revenue earning model Clerkenwell: 22 unit development. 4 social rent, 9 discounted rent, 9 market apartments for rent Soho: 6 apartments and office. 5 discounted rent 1 market penthouse for rent Office, 1,500 sq P for rent
New revenue streams: Managing for others Promo-ng skills, experience and local knowledge Management offer at marginal cost Suppor-ng developers with retained ownership of s.106 with Soho Ltd managing agent
Managing for others: examples Covent Garden: Capco. Management of s.106 affordable homes. Soho: Dolphin Square Founda-on. Management of 65 discounted rent apartments (under construc-on)
Other opportuni-es for new revenues Joint ventures Project management Development support Partnerships
Selling exper-se: Examples Maida Vale: JV development of social rent block leased to local authority. Soho: Development of homes above shops.
Steps towards diversified income: Good understanding of exis-ng assets and opportuni-es Skills sets and resources to make things happen Iden-fy exper-se and local offer Be crea-ve, commercial & opportunis-c Rela-onship building Clarity and focus of business objec-ves Remain close to your purpose