What to do in a downturn

The current economic downturn, and resulting decline in development activity, have most likely led many estates directors to push their plans for land sales to one side. The boom years opened up countless opportunities to drive forward healthcare provision and even build new hospitals from funds generated by land sales. But it would be a mistake to assume that the bounty of development prospects may have completely vanished. Although the private housing sector is in disarray, the Government has still identified a need for 240,000 new homes to be built every year until 2016 – and this figure is now likely to be higher given the record low level of starts in 2009. Meanwhile, millions of pounds have been poured into social housing by the Homes and Communities Agency – formerly English Partnerships – turning many social landlords into developers in their own right. This funding will come with strings attached. For example construction of housing under the Code for Sustainable Homes – Level 3 at the very least is likely to be a prerequisite. In addition, factoring in community heating and power generation or advanced urban drainage systems could also add value to planning permissions and differentiate a property from the market at large. Due to their location, hospital sites naturally endear themselves toward residential development, but other, related health services can help to underpin a mixed-use scheme of office and other development.

NHS can underpin development in troubled times

 We are working on a project for Middlesborough Council and Middlesbrough College, for example, where the incoming developer is combining the provision of new healthcare facilities with residential development. In this instance the redevelopment will include a conference centre for the local Trusts and a new health clinic combining three existing GP practices. In essence these occupiers will help to shore up funding streams in the early part of the development programme, with the housing scheme following when that market recovers. In the current climate, large public sector occupiers can underpin a mixeduse scheme and help take it forward. As the economy recovers, private sector tenants and owner-occupiers will be drawn in by an established development.