MIT CASE Competition 2014 Presentation

8/21/2019 MIT CASE Competition 2014 Presentation

1/15

SOUTH BANK DEVELOPMENT


2/15

Embracing Real Estate Opportunity

Re-establish HQ on Londons South Bank amongst contemporary iconicdevelopments

Destination for National fan base of their globally renowned TV shows

Reconnect with the immediate community

Mix of uses more welcoming for their industry clients

Modernize HQ and studio operations

Streamline operations to improve company revenue

A new ITV for the New London.

South Bank Development is their partner for primetime.

Redevelopment of the site. Redevelopment of the brand.

Increasing Brand Value through Enhancement of Real Estate

New iconic ITV HQ connecting to resurgent South Bank RE

Opening Property to Thames Riverfront Promenade; increasing viewcorridors

Interior central plaza welcomes neighborhood & London area tourists

Interactive Multimedia Museum & Experience Centre

Open viewing studio provides the public and fans unique experience toenjoy ITV programming

Educational opportunities for the area students and families

Mixed-Use Development creates dynamic & social property

Image Buzz that resonates with the new Technology, Media andTelecommunications sector taking shape in South Bank

Hotel provides ITV industry professionals convenient & indulgingexperience while working on their ITV production

Upgraded, consolidated & environmentally sustainable new HQ willprovide accretive expense savings for ITV

: Enhanced Brand ValueSOUTH BANK DEVELOPMENT


3/15

ALIGNMENTOFALLPARTIESINTERESTS

Rebranding of iTV Iconic Headquarters for

Studio and OfficeSpace

Cohesive developmentfor employees & clients

Improve Local & GlobalPresence

ITV SouthBankDevelopment CityofLondon MarketDemand

Opportunisticdevelopment opportunity

Levered IRR of ____+ Positive NPV Contribute to

repositioning of SE1

Revitalization of SE1 Increased Tax Base Affordable Housing Job Creation

Strong demand for office,

hotel & condominium realestate Shortage of Class A office

supply, boutique hospitality& luxury residential

Demand for revitalization ofSE1

Successful development ofThe Chard supports marketdemand

Acquisition & Development Strategy

Acquire Free Hold Interest of London Television Centre

Proposed Acquisition Price of 50,000,000 (net of 150,000 SF of Studio Space); Providing ITV with a

return of ~15%. Cost: 56 + 6.5 = 62,500,000; Value of Studio: 20/year NNN x 150,000 = 3,000,000

/ 8% = 37,500,000; Discount on Value: 50% x = 37,500,000 = 18,750,000; Acquisition - Value of

Studio = 43,750,000. Purchase Price = 43,750,000 x 1.15 (Owner Profit) = ~ 50,000,000

Demolish Existing Infrastructure

Construct Dynamic Mixed Use Development

Balanced Mix of Programs: Office, Condominium, Hotel, Retail & Parking

Develop Iconic ITV Headquarters for Studio & Office Space

Participate in the Revitalization of SE1


BIGBENTHESHARDLONDONEYEITVCENTRE

ITVCentre

SourcesandUsesofFunds

AboveGradeGSF 865,239GSF

BelowGradeGSF 146,598GSF

Total ProjectGSF 1,011,837GSF

Amount % $ /Unit $/GSF*

SOURCESOFFUNDS

DeveloperSponsorEquity $22,848,231 6.24% $23 $22.58

ThirdPartyInvestorEquity $205,634,079 56.16% $203 $237.66

SeniorLoan

$136,692,064 37.33% $135 $157.98

PropertyCashFlow $997,480 0.27% $1 $1.15

TotalSourcesofFunds $366,171,853 100.00% $362 $423.20

Amount % $/Unit $/GSF*

USESOFFUNDS

LandandAcquisitionCosts $54,500,000 14.89% $54 $62.99

Demol ition $1,000,000 0.27% $1 $1.16

HardCosts $222,647,807 60.81% $220 $257.33

SoftCosts $33,397,171 9.12% $33 $38.60

VATTax $51,408,996 14.04% $51 $59.42

DeveloperContingency $1,000,000 0.27% $1 $1.16

FinancingCosts $2,071,092 0.57% $2 $2.39

Operating

Deficit $82,719 0.02% $0 $0.10TotalUsesofFunds $366,107,784 100.00% $362 $423.13


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Programming

GSF %

Office 339,000 34%

ITVOfficeSpace 200,000

SpecOfficeSpace 139,000

ITVStudio 165,748 16%

Retail 39,967 4%ITVExperienceCentre 15,291

HotelRestaurant 21,258

StreetFrontRetail 3,418

Condominium 175,280 17%

MarketRateUnits33

AffordableUnits36

Hotel151Keys 145,244 14%

Parking 146,598 14%

1,011,837 100%

A landmark headquarters supported by a mixed program that benefitsstakeholder interests and a resurgent community

34%

16%4%

17%

14%

14%

195meters(639

ft.)

283

meters(869ft.)

137

meters(450ft.)



5/15

Office & Studios

200,000 GSF - ITV Office Space, Floors 10 - 35

139,000 GSF - lettable office space, Floors 36 - 49

Creative hub designed for media & technology firms

Spectacular 360 views of London

75% of Fortune 500 Companies have a London Office

Strong Overseas Investment in office real estate

Office

150,000 GSF - ITV Studio Space, Ground 9th Floor State of the art ITV Custom Studio Design Column free production spaces with 12 meter ceiling heights Iconic Cantilevered Studio showcasing ITV Brand ITV Freehold Interest

Adjacency to ITV Office Space Convenient loading dock access

ITV Studios

Office prime rents jumped in 2013, The Shard rents between 55 and 60 psf

Savills World Research reported top rents YTD in SE1 at 55 psf

CBRE reported top lets for South Bank as of Q4 2013 at 47.50 psf

Per PPR, South Bank is on course for strongest letting year since 2007

Source: Jones Lang LaSalle



6/15

Hotel & Condominium

Luxury full service flagged hotel with 151 keys Positioned for tourists, ITV employees & clients Irreplaceable rooftop bar and pool with panoramic views Strong local occupancy at 85%; Strong ADR at 114.47 Potential boutique flag partners: Thompson, Ace, Standard etc.

Hotel

Luxury Condominiums

Source: Smith Travel Research/ STR Global, Inc. Trend Report (South Central London

82 Luxury Condominium Units 39 - Affordable 1,000 SF Units, 17 - 1 BR 1,500 SF Units, 16

2BR 2,000 SF Units & 10 3BR 3,000 SF Units Luxury Fitness & Media Centre

Distinctive Balcony(s) for each unit Dedicated Marketing Website capturing Sales Strategy Average Asking Price per Square Foot of 1,524

ResidentialCompSummary

No. PropertyNameorAddress

Postal

Code

Distanceto

Subject(meters) AskingPrice SquareFootage Bedrooms/Bath

PricePer

SquareF oo t L ist in gFirm

1 AlbertBridgeHouse SW11 4787 1,980,000 1377 2Bed2Bath 1,438 KnightFrank

2 AlbionRiverside SW11 4996 1,595,000 1,442 2Bed2Bath 1,106 KnightFrank

3 PeninsulaHeights SE1 2128 2,450,000 2,174 2bed3Bath 1,127 KnightFrank

4 SpiceQuayHeights SE1 2390 1,900,000 1,185 2Bed3B ath 1 ,60 3 Hurford,Salvi,Carr

5 NEOBankside SE1 709 5,750,000 2744 3Bed2Bath 2,095 KnightFrank

6 9Albert

Embankment SE1 2039 2,995,000 1,687 3

Bed

3

Bath 1,775 Knight

Frank

7 OneBlackfriars SE1 382 1,850,000 NA 2Bed2Bath NA Colliers

8 OneBlackfriars SE1 382 2,900,000 NA 3Bed3Bath NA Colliers

Average 1,524



7/15

39,967 GSF of prime retail at the centre of a lively mixed-use community Highly visible ITV Experience Museum & Store -15,291 GSF Ground floor caf and pub space on the Riverwalk 3,418 GSF Destination sky restaurant and bar at 137 meters - 21,258 GSF Restaurant activation of Neighborhood connection with Riverfront

Promenade Strong exit cap rates of 5.0% reported by CBRE & JLL

Retail

Newly Constructed Below Grade Parking ITV Office Parking Spaces: 100 Market Office Parking Spaces: 2 Condominium Parking Spaces: 56 Hotel Parking Spaces: 19 Retail Parking Spaces: 4 Strong Rental: Per CBRE Global Office Occupiers Guide 2011 Asking 4,000 / month Sales Revenue: One Blackfriars Asking 75,000

Parking

Retail/RestaurantComp

Summary

No. PropertyAddress PostalCode AskingRent SquareFootage

PricePerSquare

Foot ListijngFirm

1 2GantonStreet W1 45,000 644 70 Cushman&Wakefield

3 3840LudgateHill EC4 200,000 1,520 132 CBRE

4 103107Waterloo SE1 150,000 1,250 120 Savills

5 128King'sRoad SW3 185,000 2,232 83 Savills

6 181King'sRoad SW3 500,000 7,181 70 Savills

7 OxoTower SE1 11,289 355 32 Savills

9 125WoodStreet EC2 72,500 660 110 Savills

Average 88

SOUTH BANK DEVELOPMENT Retail & Parking


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A Diverse Submarket & Strong Access to Subject

MixedUseDevelopments:2 ShellCentre

3 OxoTowerWharf

Landmark:4 LondonEye

5 TowerBridge

6 BigBen

7 PalaceofWestminster

8 TrafalgarSquare

9 St.PaulsChurch

10 TowerofLondon

11 City

Hall

Cultural12 TateModern

13 ShakespearesGlobeTheatre

14 RoyalNationalTheatre

15 QueenElizabethHall

16 Royal

Festival

Hall

17 FlorenceNightingaleMuseum

18 TheOldVic

19 YoungVic

Transport:20 WaterlooTrainStation

21 WaterlooBridge

22 BlackfriarsBridge

23

Millennium

Bridge

24 LondonBridgeUndergroundTrainStation

Park25 RiversideWalkwayandOpenSpaces

26 BernieSpainGardens

27 St.JamesPark

28 VictoriaEmbankmentGardens

10

Office:29 SeaContainersHouse

30 BlueFinBuilding

31 TheShard

32 ThePlace

33 TheGherkin

Hotel:31 ShangriLa(InsideThe

Shard)

38 LondonMarriottHotel

CountyHall

39 Park

Plaza

County

Hall

40 ParkPlazaWestminster

Bridge

Retail/Entertainment:34 GabrielsWharf

35 SeaLifeLondonAquarium

36 London

Dungeon

37 BoroughMarket

Residential(Luxury):41 SouthBankTower

42 OneBlackfriars

43 NEOBankside

44TowerBridge

45 Spice

Quay

Heights

1 ITV CENTRE (PROJECT SITE)

10

10

10

8

9

2

13

4

5

6

7 11

12 13

1415

16

17

18 1920

21 22

23

24

25 26

27

28

29

31

32

33

38 39

40

34

35 36

37

41

43

44

45

30

4142

ARenownedCreativeArtsDistrictwithaBurgeoningTechnology,MediaandTelecommunicationsIndustry



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10 Year Holding Period Ensures Successful Completion &

StabilizationSOUTH BANK DEVELOPMENT

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Offer, Negotiation & Due Diligence

Ownership Entity Creation

Design & Permiting

Construction Loan Funding

ITV Property Occupancy

ITV Relocation to Temporary Site

ITV Return to SiteAdditional Property Leasehold Creation

Pre-Construction Period

Demolition Period

Construction Period

Condo Sales

Leaseup

Stabilization

Disposition


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Joint Venture StructureSOUTH BANK DEVELOPMENT

Partnership Structure

Total Required Equity (Purchase + Operation) 228,482,310 (Includes Operating Deficit Funding)

Sponsor/Developer 10% 22,848,231

Third Party Investor 90% 205,634,079100% 228,482,310

Profit Sharing

Waterfall #1 Preferred Return

Partnership Structure % Total Equity 8% Residual SplitSponsorPromote

Sponsor/Developer Equity 10% GP Equity 10% 20% 10%

Investor 90% LP Equity 90% 80%

Total 100% 100% 100%


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Design Strategy : Composition

Varied faade treatment reflects each program setting

Showcase cantilevered studio: Londons sightline into the new look of ITV

Diverse array of condominium terraces: A distinctive setting for every residence

Setbacks and voids generate an open air composition at both ground and

elevated levels



14/15

Design Strategy : Maintaining View Corridor

Positioning of towers preserves views of St. Pauls

Cathedral from Westminster Pier

Dynamic central plaza unites the street and the River walk

Matchless design enlivens the south bank riverfront



15/15

Environmentally Sustainable

BarclaysCycleHireStations willbelocatedontheriverfrontandstreetfront

Electricvehiclechargingstationsformovethathalfoftheproject'sparkingstalls

HealthandWellbeing

WaterConsumption

Waste

LandUse

Transport

Materials

Management

Pollution

Energy

Efficiency

Ecology

OnSiteRenewableEnergy

Continually striving for the highest environmental standards andsustainable practices, South Bank, will work with BREEAM at the pre-construction phase through finishing to attain the highest certification, 5-Star Outstanding Status, for New Construction Office, Multi-Residentialand Retail

South Bank, to maintain peak sustainable operations will seek the highestrating A for the Domestic and Non-Domestic Energy PerformanceCertificate from the Energy Performance Assessor

Sustainability Plan Additionally Achieves the Following:1. Adherence to Lambeth Local Development Framework social

and green infrastructure development2. Provides the client and partner with an environmentally

beneficial headquarters to live and work

3. Preserves long term operational rewards through the expensesavings realized in sustainable construction and management


Flood Risk Management

Project site falls within Flood Zone 3a Projected by flood defenses and the Thames Barrier South Bank will work with council and the environmental

agency to manage and mitigate ongoing flood risk Planning application will be submitted with a completed flood

risk assessment Strict compliance with the exception test in national policy and

London plan policy Though site development is outside of 16 meter tidal flood

defense, measures to mitigate flooding from ground water andsewers shall be incorporated into construction

Documents

MIT CASE Competition 2014 Presentation