Mayow Road, Perry Vale, London Independent Viability Review for London Borough of Lewisham

Home , Bermondsey, Mayow Park, Perry Vale

September 2019

Prepared by

GL Hearn Limited 4th Floor 65 Gresham Street London EC2V 7NQ

T +44 (0)20 7851 4900 glhearn.com

September 2019 Independent Viability Review, for, London Borough of Lewisham

Contents

Section Page

1 INTRODUCTION 4

2 GENERAL METHODOLOGY 5

3 CRITIQUE OF BENCHMARK LAND VALUE 7

4 THE PROPOSED DEVELOPMENT 10

5 VIABILITY APPRAISAL INPUTS & ASSUMPTIONS 11

6 VIABILITY APPRAISALS & CONCLUSIONS 20

Appendices

APPENDIX A: CAMPBELL ROAD MARKETING PARTICULARS

APPENDIX B: SUBJECT SITE MARKETING PARTICULARS

APPENDIX C: JOHNSON ASSOCIATES CONSTRUCTION COST ASSESSMENT

APPENDIX D: ARGUS DEVELOPER APPRAISAL SUMMARY

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Quality Standards Control

The signatories below verify that this document has been prepared in accordance with our quality control requirements. These procedures do not affect the content and views expressed by the originator.

This document must only be tre ated as a draft unless it is has been signed by the Originators and approved by a Business or Associate Director.

DATE ORIGINATORS APPROVED September 2019 Max Vasey Alistair Parker Development Surveyor Development Director

Limitations This document has been prepared for the stated objective and should not be used for any other purpose without the prior written authority of GL Hearn; we accept no responsibility or liability for the consequences of this document being used for a purpose other than for which it was commissioned.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

1 INTRODUCTION

1.1 GL Hearn has been instructed by the London Borough of Lewisham to undertake an Independent Viability Review in respect of a proposed development at Our Lady and St Philip Neri Roman Catholic Primary School, Mayow Road, Lewisham for which a planning application has been submitted by Bellway Homes (the Applicant).

1.2 The subject site measures approximately 0.81 Acres (35,263 sq. ft.) and is comprised of a vacant former school known as Our Lady and St Philip Neri Infant School built in the circa 1950s/1960s. We believe the former school building to measure approximately 9,752 sq. ft.

1.3 The site is situated on the west side of Mayow Road approximately 0.2 miles north of Mayow Park. The site is bound by Acorn Way to the North. The site is situated approximately 0.5 miles south east of Forest Hill London Overground station and 0.5 miles north east of Sydenham London Overground Station.

1.4 Upside London Limted Property (U.L.L. Property) is the lead author of the Financial Viability Assessment (FVA) but they have relied on several sources of third-party advice. Specifically, the following information has been incorporated in their assessment: -

• Stock Wool Architects • BCIS - Cost Assessment

The Application Scheme

1.5 Planning permission (DC/19/113252) is sought by the Applicant for the following;

“The demolition of Our Lady and St Philip Neri Roman Catholic Primary, Mayow Road SE23 and the construction of a part three/part four/part five storey building to provide 24 one bedroom, 27 two bedroom and 8 three-bedroom self-contained flats, together with landscaping, play areas, cycle parking, accessible parking and associated works..”

1.6 U.L.L. Property has indicated that the assumed scheme results in an effective deficit of £466,000 when the Residual Land Value is compared to U.L.L. Property's opinion of Benchmark Land Value. Despite the projected deficit indicated, U.L.L. Property has stated that the Applicant is willing to bring forward the site.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

2 GENERAL METHODOLOGY

2.1 GL Hearn’s review of the FVA has had regard to the RICS Guidance Note “Financial Viability in Planning”, the GLA Affordable Housing and Viability SPG (2017), National Planning Policy Framework (2018), and Planning Practice Guidance on Viability (2018) as appropriate.

2.2 We do not take issue with the overarching methodology used by U.L.L. Property within their assessment. They have:

• Assessed the realisable value of the proposed scheme; • Assessed the costs associated with delivering the scheme; • Assessed a Benchmark Land Value (based on a reported EUV) • Undertaken a residual appraisal to calculate the Residual Land Value which is compared against the Benchmark Land Value to establish whether the scheme is viable or not assuming the current level of planning obligations.

2.3 U.L.L. Property has used the Argus Developer appraisal programme to assess the viability of the development. This is a commercially available, widely used software package for the purposes of financial viability assessments. The methodology underpinning viability appraisals is the Residual Method of Valuation, commonly used for valuing development opportunities:

Gross Development Value of the proposed scheme

LESS

Build costs, Section 106 costs and CIL, cost of sale, finance costs

LESS

Developers profit / Risk return

Residual Land Value

2.4 The approach adopted by U.L.L. Property has been to adopt several assumptions in relation to the proposed scheme which produces the Residual Land Value. With this approach, if the Residual Land Value is lower than the Benchmark Land Value, then the scheme is deemed to be unviable and is therefore unlikely to come forward for development unless the level of policy compliant affordable housing and/or planning obligations can be reduced.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

2.5 U.L.L. Property has adopted a BLV of £2,159,000 based on the sales of land with D1 use. This comprised their opinion of the Existing Use Value of the property at £2,106,000, then deducting purchasers’ costs of 6.8% before applying a 10% landowners’ premium.

2.6 U.L.L. Property has modelled the proposed development which results in a Residual Land Value of £1,693,000 and thus a deficit of £466,000 when compared to the assumed BLV of £2,159,000. Despite the projected deficit U.L.L. Property indicate that the applicant is willing to bring the scheme forward.

2.7 Given that the calculations are being made well in advance of commencement of the development, the figures used in the applicant’s appraisal can only be recognised as a projection. As such, it is essential that all assumptions are carefully scrutinised by the Council to ensure that they reflect current market conditions and have not been unreasonably depressed in respect of the value or overestimated in respect of the development costs.

2.8 GL Hearn’s approach has been to critically examine all the assumptions on which the U.L.L. Property appraisal is based.

2.9 It is also important to carefully scrutinise the applicant’s methodology. In particular the measure of Benchmark Land Value has a fundamental effect on the viability equation.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

3 CRITIQUE OF BENCHMARK LAND VALUE

3.1 Determining an appropriate Benchmark Land Value is often the most important factor in determining viability. Put simply, if the value generated by the development does not produce a positive figure, there is no financial incentive to bring forward the development with all its associated risk.

3.2 Arriving at an appropriate BLV is not a straightforward exercise and this is acknowledged at 3.4.6 of the RICS Guidance Note which states that:

3.3 “The assessment of Site Value in these circumstances is not straightforward, but it will be, by definition, at a level at which a landowner would be willing to sell which is recognised by the NPPF.”

3.4 In arriving at an appropriate BLV regard should be had to existing use value, alternative use value, market/transactional evidence (including the property itself if that has recently been subject to a disposal/acquisition), and all material considerations including planning policy. Existing Use Value is widely used in establishing Benchmark Land Value and is supported in the latest mayoral SPD and by the London Assembly Planning Committee.

Summary of Applicants Position

3.5 The subject site measures approximately 0.81 Acres (35,263 sq. ft.) and is comprised of a vacant former school known as Our Lady and St Philip Neri Infant School built in the circa 1950s/1960s. We believe the former school building to measure approximately 9,752 sq. ft.

3.6 The site is situated on the west side of Mayow Road approximately 0.2 miles north of Mayow Park. The site is bound by Acorn Way to the North. The site is situated approximately 0.5 miles south east of Forest Hill London Overground station and 0.5 miles north east of Sydenham London Overground Station.

3.7 U.L.L. Property has adopted a BLV of £2,159,000. This comprises their opinion of the Existing Use Value based on the sale of the site for D1 use at £1,980,000 then deducting purchasers’ costs of 6.8% before applying a 10% landowners’ premium.

3.8 To inform their opinion of EUV, U.L.L. Property has relied on sales of D1 uses before taking an average price per sq. ft. The sales range widely in terms of both location, value and date of transaction.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

3.9 With respect to the approach adopted and evidence provided, additional scrutiny should be focused on any comparable land sales provided on the basis of their “Existing Use” as they are likely to contain a significant element of hope value for redevelopment and are therefore more likely to reflect a Market Value based benchmarking approach. Accordingly applying a landowner’s premium to such a figure would double count the incentive necessary to bring the site forward for redevelopment. Furthermore, any price paid for a development site may not fully reflect the requirements of planning policies including the appropriate provision of affordable housing.

3.10 With respect to the additional evidence provided limited details were included in U.L.L. Property’s submission and we have undertaken our own research.

• We understand 1 Campbell Road, Croydon was sold in May 2018 at a price of £3,750,000 reflecting a capital value rate of £194. We note from the marketing details (See Appendix A) the property explicitly is advertised as having ‘considerable development potential’ and therefore the purchase price may reflect an element of hope value.

• We have been unable to confirm the details of the sale of 113 Blegborough Road.

• 1A Ashridge Way, Morden sold in September 2014. We consider the date of this transaction to be historic and therefore have not considered useful evidence in assessing the existing use of the site.

• 1A Throwley Way sold in August 2016, subject to planning as a place of worship. We consider the transaction date of the sale to be too historic to be considered as useful evidence.

Existing Use Value

3.11 We note that the applicant purchased the site in April 2019 at a purchase price of £5,375,000. A copy of the marketing details is attached as Appendix B. While we do not agree with the methodology in arriving at the existing use value, we have tested the level of affordable housing using the Applicant’s benchmark land value.

Premium

3.12 U.L.L. Property adopted a premium of 10% by way of a landowner’s incentive to bring forward development. The latest Mayoral SPD states that premiums require justification and could be between 10 per cent and 30 per cent but must reflect site specific circumstances.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

3.13 A 20% incentive is appropriate for standard existing built investment assets with a relatively high EUV relative to Market Value. As the site is currently a vacant former school building without a tenant, we consider 10% to be an appropriate incentive.

Benchmark Land Value

3.14 Adopting the Applicant’s Existing Use Value of £2,106,000, to which to deduct purchasers’ costs, and applied a landowner’s premium of 10%, we have used the Applicant’s benchmark land value of £2,159,000.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

4 THE PROPOSED DEVELOPMENT

4.1 The site is located on the western side of Mayow Road at its northern end and adjacent to Acorn Way. The northern extremity of the road comprises largely of circa 1960s residential housing with a more modern development built adjacent to the site on Acorn Way. The southern extremity of the road largely comprises Edwardian period town housing. The subject site is located 0.2 miles north of Mayow Park on the same road.

4.2 Mayow Road is connected by Perry Vale to the North and Sydenham Road to the South, located within the Perry Vale Ward. Perry Vale (B227) provides access the South Circular (A205). Forest Hill and Sydenham Road located approximately 0.5 miles from the subject site both provide local amenities.

4.3 In terms of connectivity, the site is located approximately 0.5 miles to the north east of Sydenham and 0.5 miles to the south east of Forest Hill London Overground Stations. The stations additionally provide access to National Rail Services which provides direct access into central London. Bus services are also available on the subject road providing access to Lewisham to the north east and Croydon to the south west.

4.4 The proposed scheme is a wholly residential block of flats with 3/4/5 storeys and will provide the following residential accommodation:

Unit Type Private Units Affordable Rent Units Shared Ownership Total Units (LAR) Units One Bed 17 3 4 24 Two Bed 19 4 4 27 Three Bed 3 4 1 8 Totals 39 11 9 59

Unit Type Residential Units Average (Sq. ft.) Total (Sq. ft.) One Bed 24 557 13,372 Two Bed 27 790 21,333 Three Bed 8 964 7,715 Totals 59 42,420

4.5 The site will contain cycle storage and will have no provision for car parking.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

5 VIABILITY APPRAISAL INPUTS & ASSUMPTIONS

5.1 We consider below the various inputs and assumptions contained within the financial viability assessment provided by U.L.L. Property.

Development Phasing & Timescales

5.2 U.L.L. Property has adopted the following development timings:

• Purchase: 1 month • Pre-construction: 4 months; • Construction: 18 months • Sales: 9 months

5.3 We do not take issue with the timings above. We would expect a proportion of sales to be made prior to completion and a sales rate of 2-3 units per month post completion. Based upon the above timings we have assumed a total period of 32 months.

Market Residential Values

5.4 U.L.L. Property includes a schedule of asking prices of three comparable new build developments to arrive at a private sales rate of £602.95 per sq.ft.

5.5 The applicant has provided asking prices from schemes in proximity to the subject site but has not provided achieved sales evidence in support of these figures which is surprising. Accordingly, we have undertaken our own comparable research.

General Market Commentary

5.6 House prices have continued to grow with the Land Registry House Price Index (HPI) reporting an annual rate of growth across England at 0.4% and a monthly change of 0.5% (July 2019). The average house price in England currently stands at £248,837. London experienced a decrease in the year to July 2019 at -1.4% but the average house prices in London remain significantly higher than the UK average at £477,813.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

5.7 The General Election result, with a hung parliament and a minority Government, following on from Britain having voted to leave the EU and triggering Article 50, has been a period of uncertainty as both the UK and indeed the world economy adjust to the implications. The short-term implications will be one of further adjustment and will be dependent upon financial stability, while markets, both in the UK and internationally, find a level. Compounding this will be whether a deal can be agreed with the European Union in October 2019 and indeed the prospect of another General Election or Referendum.

5.8 The impact on the UK property market will similarly lead to a period of ‘wait and see’ with an on- going reduction in the number of comparable property transactions in what could be a fluid and potentially volatile macro-economic climate. Transactional volumes are already significantly down and the result of a no deal with the European Union is only likely to compound this. A period of inertia might be expected and remains to be seen, although whether there is a more dramatic change, manifesting itself in a fall in values and disinclination to trade, is uncertain until it is clear how the market will be affected in the longer term.

5.9 Despite the uncertainty the Government are seeking to promote business as usual by reassuring the markets that investment in major infrastructure projects will continue as planned, and that increasing the supply of housing remains a national priority.

5.10 Lewisham generally continues to be a popular destination for home buyers benefiting from strong transport connectivity and its proximity to Central London. Developer interest and demand for sites is strong across the borough.

5.11 In terms of residential values, the London Borough of Lewisham has an average residential property value of £399,485 as at July 2019. According to the same data, from the Land Registry, residential property values in Lewisham demonstrated annual decrease of 3.4%.

5.12 Below are details of some recent sales of similar properties located in close proximity to the subject site, which share similar characteristics to the proposed scheme.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Address Description Sale Price Agent 1 Bed Flats 51 William Booth 5th floor 1 bedroom flat in a £399,950 Rightmove House Prices Road, London, modern new development (£602psf) SE20 8BX with a balcony. 0.2miles from Anerley Overground Exchanged Station. 664 sq ft. August 2019 st Catalpa Court, 1 bed flat in modern £290,000 1 Avenue Hither Green Lane, development with balcony. London, SE13 Second Floor. 504 sq ft. (£575psf)

Exchanged

February 2019 Purbeck Gardens, 1 bed flat in modern £375,000* Kinleigh Folkard & Dylon Works, development with large (£700psf) Hayward Sydenham, SE26 balcony. High spec with 5FG video entry system. Asking Second Floor. 535 sq ft. (*Agent doesn’t feel it will fetch this much) September 2019 Flat 32, Centralis 1 bed 3rd floor flat in £375,000 Peabody / Acorn OMS, Lewisham, development completed (£646psf) SE13 7TG mid 2018. Access to winter garden. 580 sq ft. Sold

October 2018 Flat 37, Centralis 1 bed 4th floor flat in £377,000 Peabody / Acorn OMS, Lewisham, development completed (£652psf) SE13 7TG Mid- 2018. Access to winter garden. 578 sq ft. Sold

March 2019 Flat 5, Zanara First floor 1 bed new build £385,000 Acorn / Land registry Court, 24 flat with Balcony. (£650psf) Sydenham Rd, Construction completed Forest Hill SE25 end of 2018. 592sq ft. Sold 5QW June 2019 Flat 6, Zanara First floor 1 bed new build £360,000 Acorn / Land registry Court, 24 flat with Balcony facing (£597psf) Sydenham Rd, South. Construction Forest Hill SE25 completed end of 2018. Sold 5QW 592sq ft. November 2018

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Address Description Sale Price Agent 2 Bed Flats Apartment 5, 351 2 bed high spec flat in £375,000 Acorn, New Homes Sydenham Road, modern development. 1st (£531 psf) London Sydenham, SE26 floor. Close to both Lower 5SL Sydenham and Sydenham Sold station. Open plan with 1 bathroom. 706s q ft. March 2019 Apartment 9, 351 2 bed high spec flat in £365,000 Acorn Sydenham Road, modern development. 3 rd (£633psf) Sydenham, SE26 Floor. Close to both Lower 5SL Sydenham and Sydenham Sold station. Open plan with small Juliette Balcony and 1 bathroom. 576 sq ft. June 2019 Flat 2, Zanara First floor 2 bed new build £390,000 Acorn Court, 24 flat with 1 bathroom and (£566psf) Sydenham Rd, storage space. Forest Hill SE25 Construction completed Sold 5QW end of 2018. 689sq ft. January 2019 Flat 8, Zanara Large open plan 2 bed £550,000 Acorn / Rightmove prices Court, 24 new build flat. Duplex Split (£543psf) nd rd Sydenham Rd, over the 2 and 3 floor. Forest Hill SE25 1012sq ft. Sold 5QW May 2019 Flat 12, Dane 2 Bed new build flat in £512,000 Crest Nicholson House, Exeter gated community. Access (£642psf) Place, Wells Park to communal gardens. 1 st Place Lewisham, floor. Views of London. Sold SE26 6AE Juliet Balcony. and 7 mins walk to Sydenham Hill Station. 797 sq ft. October 2018 Purbeck Gardens, 2 bed new build flat within £495,000 Barnard Marcus Dylon Works, development completed in within 5% of above Sydenham, SE26 February 2019. 3 rd floor (£582psf) 5FG with a balcony. 850 sq ft.

Exchanged

August 2019

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Address Description Sale Price Agent 3 Bed Flats Flat 7, Zanara 3 bed high spec flat in £560,000 Acorn, New Homes Court, 24 modern development (£510psf) London Sydenham Rd, completed end of 2018. Forest Hill SE25 Split over 2 nd and 3 rd Floor. Sold 5QW 1098 sq ft. December 2018. Flat 16, Zanara 3 bed high spec flat in £540,000 Acorn New Homes London Court, 24 modern development (£570psf) Sydenham Rd, completed end of 2018. Forest Hill SE25 Ground Floor with large Sold 5QW private terrace. 947 sq ft. March 2019 Flat 10, Dane 3 Bed new build flat in £568,000 Chrest Nicolson House, Exeter gated development. 1 st (£606psf) Place, Wells Park floor. Juliet balcony. Place, Lewisham, Access to communal Exchanged SE26 6AE, gardens. 937 sq ft. June 2019 Purbeck Gardens, 3 bed new build flat within £525,000* Barnard Marcus Dylon Works, development completed in (£530psf) Sydenaham, SE26 February 2019. 3 rd floor 5FG with a balcony. 2 Exchanged bathrooms and open plan. 990 sq ft. August 2019 *within 5% of asking price

5.13 351-355 Sydenham Road is a relatively small development of 9 flats finished to a high specification in the centre of Lower Sydenham. It is located on the busy Sydenham Road close to the junction with Stanton Way, Bell Green and Southend Lane. It is located 0.7 miles to the North of the subject site. The agent Acorn New Homes London who also developed the site, advised that whilst the site was popular its proximity to a busy junction and an A road has impacted the sale prices the flats have achieved. We would therefore expect the scheme to achieve a slightly lower level of value compared the Mayow Road Development. This is illustrated by the sale of Apartment 9 in March 2019 for £375,000 (£531psf).

5.14 Zanara Court at 24 Sydenham Road is a new build development of 19 flats made up of three floors completed in 2018. It includes 1, 2 and 3 bed flats including several flats which are split over 2 floors. It is 0.7 miles south of the subject site and is in the centre of Sydenham, which according to local agents is a more desirable area than Lower Sydenham. 90% of the scheme has been sold. The

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September 2019 Independent Viability Review, for, London Borough of Lewisham

scheme is in close proximity to both Sydenham Overground and Sydenham National Rail Station, from which London Bridge can be reached in 20 minutes. The scheme has a relatively high specification and many of the flats have balconies. The sales agent advised that Flat 16 had sold in March 2019 for £540,000 (£570psf).

5.15 Acorn advised that the local market has slowed down over the last 6 months and asking prices had not been achieved, but they noted that the 1 beds were the most popular and have consistently attracted the highest prices per square foot in both developments in Sydenham.

5.16 Wells Park Place is a Chrest Nicholson Development which comprises of 26, 2 and 3 bedroom flats and 20, 4 bedroom terraces and townhouses. It’s within a landscaped surrounding at the top of Sydenham Hill which offers far reaching views of London. The site is 1.3 miles to the East of the subject site and is in close proximity to Sydenham Hill Rail Station, from which Victoria can be reached in 15 minutes and City Thameslink in 27 minutes. The sales agent advised that the apartments all sold 7 months post completion with only townhouses now remaining available. The agent also indicated that demand had been consistent. Typically, 2 beds have been selling for £500,000- £700,000. We would consider the Wells Park Place Development to have higher values than the subject scheme because of the nature of high specification development including the communal gardens / courtyards and the presence of 20 townhouses within the scheme which are fetching over £1,000,000 in the current market.

5.17 Centralis is a Peabody development of 49 homes completed at the end of 2018 comprised of 1, 2 and 3 beds spread over 6 floors. It is located in the centre of Lewisham, 3 miles to the North of the subject site. The agent Acorn informed that 80% of the development has now been sold but the remaining units were taking significantly longer to attract offers. Flat 32, a 1 bed 4th floor flat sold in March 2019 for £377,000 which equates to £652psf. The flat has access to a shared winter garden. We would consider the development to have many similarities with the subject scheme in terms of scale and specification but its superior location, being 200 metres from Lewisham Station and closer to central London, have resulted in higher values of £650psf.

5.18

5.19 We are mindful of the falling achieved prices in Lewisham and the wider London market evidenced above. Our sales evidence suggests that new build flats within close proximity of the subject site are not achieving asking prices and taking longer to transact than anticipated. Accordingly, we have adopted the applicant’s private market rate of £602.95 which we believe to be reasonable given recent market evidence of comparable schemes.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Affordable Housing

5.20 The applicant adopted rates of £426.39 per sq. ft. for the shared ownership element of the proposed scheme and £190.41 per sq ft. for the London Affordable Rent element. The applicant has not provided a methodology for which to interrogate. Accordingly, our Affordable Housing team has undertaken a Pod Plan.

5.21 The Pod Plan demonstrates rates of £357.61 per sq. ft for the shared ownership element of the scheme and £224.90 per sq. ft. for the London Affordable Rent Element. Accordingly, we have sought to test the viable level of Affordable Housing under these assumptions.

Development Costs

5.22 For construction costs the applicant has applied BCIS rates for 3-5 storey new build residential buildings in the London Borough of Lewisham. The applicant has adopted a 15% higher cost for external oversites. The applicant has adopted a total construction cost of £11,985,985.

5.23 We have been provided with a cost assessment prepared for the Council by Johnson Associates (attached to this report at Appendix C). This arrives at an overall build cost of £12,121,768 and accordingly we have applied this figure within our appraisal. This figure is inclusive of main contractor prelims, overheads and profit but excludes any allowance for professional fees and contingency.

5.24 We have made an allowance of 10% for professional fees which is a standard assumption for this type of exercise. We note that the Applicant’s FVA suggests that an equivalent allowance is adopted within its report of 10% also.

5.25 The applicant has made an allowance of 5% for contingency within their appraisal which is reasonable. We have adopted the same figure in our appraisal.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Planning Obligations

5.26 The Applicant has adopted figures of £166,524 for Mayoral CIL liability and £249,785 Borough CIL liability within their appraisal. No calculation or break down has been provided to enable us to interrogate this figure.

5.27 We have calculated the total CIL liability to be £253,891. However, we have not been party to the discussions between the Council but assume the above amounts to be correct and have adopted them for the purposes of our modelling but recommend that these are verified by the Council as they could have a material impact upon the viability of the scheme. We would recommend that the CIL calculations are provided to the Council’s CIL Officer to a full review.

Marketing, Letting & Sales Fees

5.28 We note the applicant has adopted the following assumptions within their appraisal:

• Sales agent’s fees of 1.5% • Sales legal fees of £750 per unit; • Marketing fees of 1.0%.

5.29 Our own assumptions align with those adopted by U.L.L. Property.

Finance

5.30 We note that the applicant has adopted a 7% finance rate in their appraisal. We would consider that the Applicant would be able to borrow at a rate of 6% and have therefore adopted this figure within our appraisal.

Developer’s Profit

5.31 For a commercially acceptable development to proceed, an acceptable level of developer’s return is required from the project (as is detailed within the NPPF). Profit requirements extended significantly following the 2008 global downturn. Since the revival in the development market these margins narrowed but have more recently begun to extend again as risk appetite worsens given the uncertainty following the EU Referendum vote, uncertain national and local elections, growing interest rates and a slowing residential market across greater London.

5.32 Any expected return should reflect the risks to the developer and its funder’s capital and together their potential liabilities. Accordingly, it should reflect the proposed uses, scale of development, site

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issues and market (both macro and micro). A lower profit will be typically acceptable on a conventional residential development situated in an established market location for apartments with good transport connectivity. The proposed scheme falls within this category and will attract interest from both owner occupiers and buy-to-let investors alike thus reducing development risk.

5.33 U.L.L. Property have adopted a 20% profit on GDV of the private element and 6% on GDV. This equates to a blended return of 17.02%. Given the uncertain economic climate, we consider this figure to be reasonable and have therefore adopted it in our appraisal.

Sensitivity Analysis

5.34 We have carried out the below sensitivity analysis to allow the Council to consider how changes in inputs to a financial appraisal affect viability and provide a greater understanding to arrive at an appropriate conclusion on the viability of the proposed scheme. The below table demonstrates the affect of the change in construction cost and sales on the residual land value:

Construction Cost

-10% -5% 0% +5% +10%

-10% £1,945,337 £1,310,678 £676,019 £41,148 -£635,301

-5% £2,715,582 £2,080,926 £1,446,268 £811,609 £176,953

Sales Rate 0% £4,256,083 £2,851,172 £2,216,516 £1,581,858 £947,199

+5% £4,256,083 £3,621,424 £2,986,761 £2,352,106 £1,717,448

+10% £5,026,329 £4,391,673 £3,757,014 £3,122,351 £2,487,696

GL Hearn Page 19 of 21 J:\Planning\Job Files\J041374 - Mayow Road, Lewisham\8. Project Correspondence\Viability Report\12112019_Mayow_Road_Indepedent Viability Review.docx

September 2019 Independent Viability Review, for, London Borough of Lewisham

6 VIABILITY APPRAISALS & CONCLUSIONS

6.1 Attached as Appendix D is an Argus Developer development appraisal summary considering the proposed redevelopment in accordance with the submitted application and out adopted assumptions.

6.2 Where our own market research has indicated that the inputs used have not been fully justified we have sought to illustrate the potential impact on Residual Land Value. In this respect we have undertaken our own residual appraisal using Argus Developer, which is a leading industry-standard development appraisal package commonly used by developers and agents to assess development viability.

6.3 Although this analysis does not constitute formal valuations under the provisions of the RICS Valuation Standards (‘Red Book’) it does provide robust evidence to inform the Council’s decision making process in respect of the applicants planning application.

6.4 In this instance we have been provided with a working appraisal by U.L.L. Property for the development scenario. This has enabled us to ensure the model has been constructed properly and the inputs are timed correctly within the cashflow.

6.5 As has been highlighted in the previous section there are several assumptions adopted within the proposed assessment which we are not in agreement with. Therefore, we have undertaken our own modelling applying our own assumptions which we believe to be more reflective of the market.

6.6 Given the above we have undertaken adjustments to;

• Affordable Housing sales rate • Build Cost • Finance Rate • Level of viable affordable housing assuming applicant benchmark

6.7 Attached as Appendix D is an Argus Developer development appraisal summary reflecting our assumptions. The resultant Residual Land Value and the comparison to the Applicant’s adopted Benchmark Land Value is summarised as follows:

Residual Land Value Benchmark Land Value Surplus / Deficit

£2,216,516 £2,159,000 £57,516

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September 2019 Independent Viability Review, for, London Borough of Lewisham

6.8 It is evident from the above that the residual land value generated by the proposed development, based on our assumptions, is greater than the Benchmark Land Value, adopted by the Applicant. Our appraisals from several scenarios indicate that the proposed scheme can viably deliver affordable housing.

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September 2019 Independent Viability Review, for, London Borough of Lewisham

Appendix A

Campbell Road Site Particulars

(See Attachment)

GL Hearn J:\Planning\Job Files\J041374 - Mayow Road, Lewisham\8. Project Correspondence\Viability Report\12112019_Mayow_Road_Indepedent Viability Review.docx

[email protected] bernardgordon.co.uk 020 8099 3119

Ref: 1466 Ref:1 Campbell 1464 Road Croydon CR0 2SQ

 Imposing 19,000 sq ft. Victorian Church complex approx.GI.  5,500 sq ft hall approx.to seat about 700.  Site area approx. 0.6 acres

 Two additional Halls  Offers invited in excess of £3.75million, stc

Approx. 19,000 sq ft (1,793m²) gross internal The complex is arranged in 4 sections:

Site area approx. 0.6 acres 1. The Vicarage – a detached former house now extended to Grade II Listed provide classroom/ community/office facilities Full ancillary community accommodation 2. Temple 3. Detached two storey function building comprising two large Freehold with D1 use halls, office etc 4. Main assembly hall 6 parking spaces

Rear garden

Commercial & D1 Poperty Consultants 7 Theobald Court, Theobald Street, Borehamwood, WD6

Ref: 1466 1 Campbell Road, Croydon, CR0 2SQ

Important Notice

These property particulars have been prepared in all good faith No responsibility can be accepted for any expenses incurred by to give a fair overall view of the property. If you require any intending purchasers in inspecting properties, which have been further information or verification of any points particularly sold, withdrawn or are under offer. Bernard Gordon & Company relevant to your interest in this property, please ask. do not hold themselves responsible, in negligence or otherwise, for any loss arising from the use of these particulars. Bernard It should be noted that nothing in these particulars shall be Gordon & Company reserves the right to make a reasonable deemed to be a statement that either the property is in good charge for expenses and time incurred by reason of applicants structural condition, or that any services, appliances, failure to attend confirmed appointments to inspect. installations, equipment or facilities, are in good working order. No plant, machinery or appliance electrical or mechanical, Bernard Gordon & Company have not undertaken any present at the day of inspection has been tested and environmental investigations in respect of land, air or water accordingly purchasers should satisfy themselves on such contamination. The purchaser/purchasers are responsible for matters prior to purchase. making their own enquiries in this regard.

These particulars are given as a general guideline only, and do It must be appreciated that in preparing these particulars, not constitute, nor constitute any part of an offer or contract. descriptions given of the property by the author are personal Any photographs included within these particulars depict only and subjective and are used in good faith as a personal opinion certain parts of the property and no assumptions should be and not as a statement of fact. To ensure that our descriptions made with regard to parts of the property that have not been are likely to match any expectations you may have of the photographed. Furniture, furnishings, personal belongings and property, we strongly recommend and advise that you make other contents, etc., shown in the photographs must not be additional and specific enquiries. assumed to be included in the sale, neither should it be assumed that the property or the contents remain as displayed Unless otherwise stated, in accordance with The Finance Act in the photographs. If in doubt, please ask for further 1989, all prices and rents are quoted exclusive of VAT. information. These details are believed to be correct at the time of Measurements, descriptions, areas or distances referred to compilation but may be subject to subsequent amendment. within the particulars, or indeed within any plan or plans associated with the property are given as a guide only and The terms quoted and all subsequent negotiations are subject must not be construed to be precise. If such information is to contract. fundamental to a purchase, purchasers are advised to rely upon their own enquiries. MEASUREMENTS:

Purchasers are advised to make their own enquiries regarding The measurements as set out herein are provided for guidance such matters relating to Planning Permissions or potential purposes only and no reliance should be placed on these when uses referred to within the particulars, where such information making any offer to lease or purchase either expressly or is given in good faith by Bernard Gordon & Company. impliedly and for the avoidance of doubt Bernard Gordon & Information relating to rating assessments has been given Company will be not liable for any losses howsoever arising in verbally. Intending purchasers/tenants should satisfy law as a result of the bidder placing any reliance on such themselves as to its accuracy from the Local Authority. measurements. The successful bidder should state if they wish to undertake a measured survey of the building prior to exchange of contracts to enable it to satisfy itself of the precise measurements

Bernard Gordon & Company 020 8099 3119 [email protected]

Ref: 1466 1 Campbell Road, Croydon, CR0 2SQ

Location

The property is located at the junction of Campbell Road and London Road, approximately midway between Sumner Road and Brigstock Road. West Croydon Station is within easy reach as is Croydon Town Centre with all its attendant travel (Rail, Buses, Trams etc), shopping, entertainment and restaurant facilities etc. The Property

This imposing church complex occupies a site extending to about 0.6 acres at the junction of Campbell Road and London Road. The complex comprises a magnificent original Victorian former church building, a two storey function hall, a temple and former vicarage. There are limited on site car parking facilities for about 6 cars and a rear garden. The main former church building includes a magnificent hall of about 5,540 sq ft (485 m²) which we are advised can seat up to about 700 people. This hall features large stained glass windows a stunning vaulted timber ceiling and a stage. The ceiling height is approximately 40’ (12.39m ).

The accommodation is split into 4 sections plus extensive storage at the rear of the site and arranged as follows:-

The Former Vicarage: A detached former house now extended to provide community/office/classroom facilities.

Ground Floor Hall:

 3 x offices/classrooms  Kitchen  WC’s and shower room  Rear Hall  Large commercial kitchen First Floor:

 4 x offices/class rooms

Function Hall: A detached two storey function building comprising two large halls, offices etc.

Ground Floor:

 Entrance lobby  WC’S  Hall plus stage approx. 2,366 sq. ft. (218.9 m²) gross int.  Mezzanine office

First Floor:

 Entrance lobby  WC’s  Hall approx. 2,352 sq. ft. (218.56 m²) gross int.

Bernard Gordon & Company 020 8099 3119 [email protected]

Ref: 1466 1 Campbell Road, Croydon, CR0 2SQ

Temple

 Hall approx. 921 sq. ft. (85.6 m²) gross int.  2 x rooms

Main Church Hall  Magnificent hall with timber vaulted ceiling and stained glass windows  Seating capacity approx. 700 people  Stage  Side Wing  Rear room  Changing room/WC  Kitchen  Gallery  Tower (not inspected)

 WC’s

Gross internal floor area including stage approx. 5,540 sq. ft (514.63 m²)

Rear Storeroom

Extensive single storey storeroom located at the rear of the site

Dimensions

Gross internal floor area approx. 19,302 sq ft (1,793m²)

Site area approx. 0.6 acres

Frontages:

Campbell Road Approx. 240’ (73.62m)

London Road Approx. 89’ (27.3m)

Bernard Gordon & Company 020 8099 3119 [email protected]

Ref: 1466 1 Campbell Road, Croydon, CR0 2SQ

Exterior Possession

Parking for up to 6 cars Full vacant possession upon completion Rear garden Costs Rating Each party to be responsible for their own legal

TBA and professional costs

EPC Holding Deposit

In hand Tenants or purchasers wishing to secure this property will be required to pay a holding VAT deposit to Bernard Gordon & Company of £5000. The property is not elected for VAT purposes This deposit is not refundable except if the vendor withdraws, clear title cannot be proved

Local Authority or the tenants’ references are not acceptable to the landlord. This deposit is held in our clients London Borough of Croydon account until completion. Price References

Offers are invited to purchase the freehold Bernard Gordon & Co charges a fee of £200 plus interest in excess of £3.75million, subject to VAT for taking up references for proposed contract. tenants. This fee is non-refundable after the

Please Note: Proof of funding will be required references have been taken up, irrespective of before a viewing can be arranged. whether or not they are accepted by the landlords. Planning

The property is Grade II listed. Inspections strictly by appointment We have been given to understand that it enjoys please contact: unrestricted D1 use.

The property also has considerable development Ben Wallis/Bernard Gordon potential. In this regard and in respect of any Bernard Gordon & Co occupational queries, prospective purchasers are advised to seek guidance from Croydon Council 020 8099 3119 Planning Department - 020 8726 6800 [email protected]

BernardBernard Gordon Gordon & & Company Company 020020 8099 8099 3119 3119 archwaycampussales@[email protected]

Ref: 1466 1 Campbell Road, Croydon, CR0 2SQ

Site plan not to scale

Bernard Gordon & Company 020 8099 3119 [email protected]

The Vicarage: Main Hall: Main Hall:

Function Hall First Floor: Function Hall External: Function Hall Ground Floor:

Bernard Gordon & Company for themselves and for the vendors or lessors of this property for whom they act: give notice:(1) these particulars are a general outline only for the guidance of prospective purchasers or tenants and do not constitute the whole or any part of an offer or contract:(2) the accuracy of any description, dimensions, references to condition, necessary permissions for use and occupation and other statements contained herein cannot be guaranteed and prospective purchasers or tenants must not rely on them as statements of fact or representations:(3) no representation or warranty is made whatever in relation to the property:(4) prospective purchasers or tenants are strongly advised to check these particulars including any fixtures and fittings expressed to be included in the sale or lease by making an inspection of them:(5) Bernard Gordon & Company will not be liable, in negligence or otherwise, for any loss arising from the use of these particulars.

Bernard Gordon & Company 020 8099 3119 [email protected]

September 2019 Independent Viability Review, for, London Borough of Lewisham

Appendix B

Subject Site Marketing Particulars (See Attachment)

GL Hearn J:\Planning\Job Files\J041374 - Mayow Road, Lewisham\8. Project Correspondence\Viability Report\12112019_Mayow_Road_Indepedent Viability Review.docx

RESIDENTIAL/ALTERNATIVE USE DEVELOPMENT OPPORTUNITY (SUBJECT TO THE NECESSARY CONSENTS) MAYOW ROAD, LONDON SE23 2XG MAYOW ROAD FOREST HILL LONDON SE23 Opportunity

FREEHOLD SITE WITH VACANT POSSESSION AND SUBSTANTIAL REDEVELOPMENT POTENTIAL, SUBJECT TO PLANNING IN A GREATER LONDON BOROUGH (ZONE 3) 20 MINUTES In the popular residential area of TO LONDON Forest Hill, Lewisham BRIDGE Situated 0.6 miles from Forest Hill train station (zone 3) - 20 minutes to London Bridge train / underground station 10 Corner, rectangular shaped site of MINUTES approximately 0.80 acres (0.32 TO SOUTH hectares) with dual road access CIRCULAR The former school provides a total GIA of 9,537 sq ft (885.9 sq m) The site offers the potential for conversion / extension to residential accommodation with a potential 15 massing GIA of circa 62,186 sq ft MILES TO (5,777 sq m) or alternative uses, THE M25 subject to planning Potential to utilise Vacant Building Credit to offset CIL and 106 contributions 6 Our client is seeking unconditional MILES TO offers in excess of £4,000,000 (four CENTRAL million pounds) for its freehold LONDON interest with vacant possession, subject to contract

2 MAYOW ROAD FOREST HILL LONDON SE23

Limehouse London City City of London 2 Airport A100 TRANSPORT 5 Catford A205 A1203 RAIL ... Forest Hill train station has Bermondsey Thames A102 Southern Rail services with regular A205 Docklands direct services to London Bridge. A200 A205 A206 The station is also on the London Forest Hill Overground with trains to Highbury A2 A206 2 Peckham Deptford Greenwich 3 & Islington and Dalston to the north Blackheath 4 D and Crystal Palace and West A O PE R RR H Y WOOLSTONE ROAD A202 T VAL Croydon to the south. The station U D E New Cross A2 O A M C also runs a service to London T R R P E Herne Hill A E S A102 D R A20 A21 R R Victoria via Clapham Junction from O Y A R B212 D IS Monday to Saturday twice an hour. E Lewisham KIRKDALE A2 B238 B218 London Bridge 20 mins A21 A20 Mayow Park 6 Clapham Junction 34 mins Sydenham 7 London Victoria 42 mins Dulwich FOREST HILL A205 1 A2218 Lower Sydenham A205 A21 A212 ROAD A2196 ... Forest Hill is on the A205 (South Circular) which offers access Not to scale. For indicative purposes only. to Greater London and the south Location east. The South Circular provides easy access to the A23 (4 miles) Approximately 6 miles from central London, Forest Hill is a popular residential area Forest Hill and Perry Vale have a large number of local Primary and the M25 (15 miles). Gatwick located in the Borough of Lewisham in transport Zone 3. It is situated south of Brockley schools, which we list below with their corresponding Ofsted rating. Airport is easily accessed by car in and East Dulwich and just north of Sydenham and Lower Sydenham. Catford is to the under an hour. Primary School Ofsted rating east and Dulwich Village and Sydenham Hill are to the west. 1. Eliot Bank Primary School Outstanding Forest Hill is a predominantly residential and leafy area with a mixture of period houses BUS .... Mayow Road is serviced by and purpose-built blocks. It is famous for the Horniman Museum and Gardens, a quirky 2. Fairlawn Primary School Outstanding Bus Route No. 75 which offers a Victorian collection with 16 acre gardens and a play area. There is an annual Edible High 3. St George's Church of England Primary School Good direct service to Lewisham to the Street event in the area with a trail of fruit trees and edibles lining the town centre 4. Holy Trinity Church of England Primary School Good north and Fairfield Halls in Croydon streets and the fine Victorian Forest Hill Pools were recently restored and extended to town centre to the south. There are become the local swimming pool and leisure centre. Slightly further afield are the larger 5. St William of York Catholic Primary School Good several other bus routes serviced green and recreational spaces of Crystal Palace and the Dulwich Estate. Dulwich Park 6. Adamsrill Primary School Good from Sydenham and Forest Hill. and Golf Club is 0.7 miles north west of Forest Hill. 7. St Michael’s Church of England Primary School Good

3 MAYOW ROAD FOREST HILL LONDON SE23

FOREST HILL SCHOOL

MAYOW PARK (17 acres) INGLEMERE SUPERMARKET FOREST HILL STATION

SOUTH CIRCULAR A205

MAYOW ROAD

To Sydenham

For indicative purposes only. ADAMSRILL PRIMARY SCHOOL FOREST HILL BOWLING CLUB

4 MAYOW ROAD FOREST HILL LONDON SE23

5 2

1 t o

8 42.5m

7 2

44.0m 9

2 6 7

S 6

hi 9 to 1 5 5 f f o

r d

1 Kelmscott

9 1

to 8

5 3

4 3

3 8

7 3

0 t 4

ons Cour

er 1

H t o 9

4 8

3 18 2 16 14 8 7 1

Y RN WA ACO El Sta Sub

46.8m 4

9 7

1 8 1 3 2

4 Radnor 5

Situation 9 M Court 3 A

6 Y

O The property is on the corner of Mayow Shops and amenities can be found 0.5 miles W

3 3 2 3 O 3 3

a b A

3 Road and Acorn Way and is located a 1 to the south on Sydenham Road and 0.5 3 3

3 3

c Our Lady and St Philip Neri d Catholic Primary School N c.10 minute walk south of Forest Hill train miles to the north on Perry Vale and Forest L GLE

APRI

3 5

a 2 station and a c.12 minute walk to Hill (A205), where there is a Sainsburys, 2

Sydenham train station. The property is Boots, Travis Perkins, fitness club, numerous 1

2 9 set within a mainly residential area with public houses and restaurants. Nearby is 4 3 the nearest public park being Mayow Park also Forest Hill Pools leisure complex that 9

1 4

2 (7 hectares / 17 acres), less than a 2 includes swimming pools, gym, children’s Forest Hill School 1 minute walk south of the property. play area and a café. The park offers a large recreational space including a bowling green, children’s Shelter Site Area DW

playground, tennis courts, Brown & Green The site is regular and rectangle in shape, 4 café, nature reserve and meadow area. on the corner of Mayow Road and Acorn 9

Forest Hill Bowling Club is opposite the Way, providing a site area of approximately property on Wynell Road. 0.80 acres (0.32 hectares). Shelter

5 MAYOW ROAD FOREST HILL LONDON SE23

Description Accommodation

The property is a two storey, FIRST FLOOR The existing accommodation former school that provides provides the following numerous school rooms and approximate gross internal 30' > 19'10" x 25'2" 30' > 19'10" x 25'2" associated facilities, laid out over 18' > 12'2" x 17' 9.15 > 6.05 x 7.65M 9.15 > 6.05 x 7.65M floor areas: 5.50 > 3.70 x 5.20M ground and first floors. The 26'10" x 17' Sq m Sq ft 8.20 x 5.20M accommodation has extended Lower ground floor/ 29 310 over the years with various basement additions. The main building’ s Ground floor 491 5,294 elevations are faced in brickwork First floor 365 3,933 incorporating single glazed, steel Total GIA 885 9,537 30'2" x 15'10" framed windows constructed 9.20 x 4.85M Please see floor plans. under flat roofs. Internally, there STAFF ROOM 17' x 15'10" are differing levels on each floor 5.20 x 4.85M accessed via two staircases. Tenure A small extension to the north is The Property is held freehold. brick built under pitched roofs to provide additional classroom accommodation. Externally, there is ample amenity GROUND FLOOR space with hardstanding and lawns, which were used for playground 50' x 25' areas and the entire site is secured 15.25 x 7.60M 17'10" x 17' 26'10" x 17' with fencing and bordered with 5.45 x 5.20M 8.20 x 5.20M some trees and shrubs. 37'5" x 19'8" > 15' 11.40 x 6.00 > 4.55M

LOWER GROUND FLOOR

KITCHEN 13'7" x 11'4" CELLAR 4.15 x 3.45M 17' x 15'10" PLANT ROOM 17' x 15'10" 5.20 x 4.85M 16'3" x 16' 5.20 x 4.85M 4.95 x 4.90M

6 MAYOW ROAD FOREST HILL LONDON SE23

Forest Hill Residential Market While the area has seen considerable capital growth over the past few years it is still relatively affordable compared to its more expensive neighbour Dulwich. House prices have increased by 9.23% over the last year (Source: Foxtons) and together with its ease of access to the City and attractive residential streets, the area has continued to attract young families and professionals. The residential property market in Forest Hill and Perry Vale has performed well recently with significant investment in new developments. Residential values in the area are increasing rapidly, regularly achieving £650 – £750 psf. Examples of recent sales are as follows:

Address Type No. of Price Area Price per ...... bedrooms (sq ft) sq ft

Sydenham Road SE23 Apartment 2 £425,000 785 £541

Zanara Court, Sydenham Road SE26 Apartment 3 £585,000 950 £616

Zanara Court, Sydenham Road SE26 Apartment 2 £575,000 925 £622

Dylon International, Lower Sydenham SE26 Apartment 3 £579,995 1030 £563

Dylon International, Lower Sydenham SE26 Apartment 2 £489,995 775 £632

Recreation Road SE26 Apartment 1 £375,000 512 £732

Peak Hill SE26 Apartment 1 £375,000 702 £534

Church Rise SE23 Apartment 1 £375,000 504 £744

7 MAYOW ROAD FOREST HILL LONDON SE23

39 Herons Court

Development Opportunity 40

1 to 9 to 1

43 18 2 16 14 8 7 1

MA Y 7 YO RN WA W R ACO

FLAT GF2 -1 BED 50m²

TERRACE 46.8m

FLAT GF3

-2 BED Planning 13 66m² 8 1 2

Radnor 4 5 • The main building at the former Our Lady & St Philip Neri M

TERRACE O

W TERRACE

FLAT GF5 R • The school has been relocated to a new site on Sydenham -2 BED

61m² O 32 TERRACE A 33a Road and the building is now vacant. Due to the relocation 33b FLAT GF9 -2 BED D

AMENITY 67m²

SPACE the loss of the school use will be considered appropriate by 31 FLAT GF6 -3 BED

FLAT GF7 82m² 33c -1 BED 33d the council allowing establishment of a C3 or C2 use at the FLAT GF8 52m² TERRACE -1 BED 53m²

site, subject to planning. TERRACE TERRACE • The building is not listed or locally listed, and the site is not 35

subject to any site designations in Lewisham. The entire site 22a is located within Flood Zone 1. 1 • A future development on the site may benefit from 9,537 sq ft

of Vacant Building Credit, which will help mitigate CIL and

22d

106 contributions. 4 39 • Bidwells Planning Team have produced a planning appraisal

for the site which is available upon request. 41

8 MAYOW ROAD FOREST HILL LONDON SE23

Indicative Scheme Options First Floor Second Floor

Factor 9 Design have prepared a TERRACE TERRACE TERRACE TERRACE TERRACE TERRACE TERRACE FLAT F2 FLAT F3 TERRACE FLAT SF2 FLAT SF3 FLAT F1 -2 BED -2 BED FLAT F4 FLAT SF1 -2 BED -2 BED FLAT SF4 -3 BED 63m² 64m² -3 BED -3 BED 63m² 64m² -3 BED feasibility study that demonstrates the 71 units arranged across 76m² 80m² 76m² 80m² undoubted development potential of the one block FLAT F17 FLAT SF17 FLAT F16 FLAT F15 FLAT SF16 FLAT SF15 -1 BED -1 BED -1 BED -3 BED -1 BED -3 BED site. The proposal comprises 48,569 sq ft 50m² 50m² 50m² 50m² 75m² FLAT F5 75m² FLAT SF5 -1 BED -1 BED 50m² 50m² Parking across the ground floor TERRACE TERRACE TERRACE TERRACE TERRACE (4,572 sq m) NSA of accommodation. TERRACE TERRACE TERRACE

FLAT F14 FLAT SF14 of the site -3 BED -3 BED 80m² 80m² Further details of the massing study are TERRACE TERRACE FLAT F6 FLAT SF6 -2 BED -2 BED available upon request from Bidwells. All units have views onto 66m² 66m² TERRACE TERRACE Please note that the plans provided by open aspects FLAT F7 FLAT SF7 -1 BED -1 BED 53m² 53m² TERRACE TERRACE the agents are to illustrate the FLAT F13 FLAT SF13 -2 BED -2 BED 38 car parking spaces 61m² 61m² TERRACE development potential of the site. TERRACE

TERRACE TERRACE TERRACE TERRACE The delivery will be subject to obtaining Single L-shaped block arranged FLAT F8 FLAT SF8 -2 BED -2 BED FLAT F12 61m² FLAT SF12 61m² -2 BED -2 BED the necessary planning consents. up to 5 storeys 67m² 67m² Prospective purchasers are encouraged

FLAT F11 FLAT F10 FLAT SF11 FLAT SF10 FLAT F9 FLAT SF9 Landscaped outside area to create a -1 BED -1 BED -1 BED -1 BED -3 BED -3 BED to undertake their own due diligence and 53m² 52m² 53m² 52m² 82m² 82m² TERRACE green amenity space for residents TERRACE TERRACE TERRACE formulate their own development TERRACE TERRACE solution in forming their offer.

.. Total no Total NSA Total GIA Third Floor Fourth Floor ... of units sq ft sq ft TERRACE TERRACE TERRACE TERRACE TERRACE TERRACE FLAT TF2 FLAT TF3 FLAT FF1 FLAT FF2 TERRACE FLAT TF1 FLAT TF4 FLAT FF3 -2 BED -2 BED -2 BED -2 BED -3 BED -3 BED -3 BED Ground 9 6,071 8,245 64m² 64m² 63m² 64m² 76m² 80m² 80m²

First 17 11,658 14,672 FLAT ROOF FLAT TF17 FLAT TF16 FLAT TF15 FLAT FF11 FLAT FF10 -1 BED -1 BED -3 BED -1 BED -3 BED 50m² 50m² 50m² Second 17 11,658 14,672 75m² FLAT TF5 75m² FLAT FF4 -1 BED -1 BED 50m² 50m² TERRACE TERRACE TERRACE TERRACE TERRACE TERRACE TERRACE

Third 17 11,658 14,672 FLAT TF14 FLAT FF9 -3 BED -3 BED 80m² 80m² TERRACE TERRACE Fourth 11 7,524 9,925 FLAT TF6 FLAT FF5 -2 BED -2 BED 66m² 66m² TERRACE Total 71 48,569 62,186 TERRACE

FLAT TF7 -1 BED 53m² TERRACE

TERRACE FLAT FF6 FLAT TF13 FLAT FF8 -1 BED -2 BED -2 BED 53m² Accommodation summary 61m² 61m² TERRACE TERRACE 1 Bedrooms 26 TERRACE TERRACE FLAT TF8 FLAT FF7 TERRACE -2 BED -1 BED FLAT TF12 61m² 57m² -2 BED 2 Bedrooms 25 67m²

3 Bedrooms 20 FLAT TF11 FLAT TF10 FLAT TF9 FLAT ROOF -1 BED -1 BED -3 BED 53m² 52m² 82m² Total 71

TERRACE TERRACE TERRACE

9 MAYOW ROAD FOREST HILL LONDON SE23

Method of Sale / Bid Details F ur ther Inf ormation The freehold interest is offered for sale by way of informal An information pack has been compiled tender. The deadline for receipt of bids is 12 noon 4th to assist developers in formulating December 2018. their offers for the site. Offers should be submitted electronically to: T he pack c ontains the following details: Darryl Stevenson: [email protected] • Title information • Planning Report Copied to: • Indicative scheme information • EPC Mike Fox: [email protected] • Desktop environmental survey Charlotte Holdsworth: [email protected]

Bids should be clearly marked: ‘Bid - Mayow Road SE23’. Should you have any queries or wish to make an inspection, please contact: Interested parties should note that the vendor reserves the right EPC Rating not to select the highest or any tender. Mike Fox The EPC rating is C-73. A copy is available upon request. DD: 020 7297 6272 Developers are asked to explicitly state the following in their offer:- [email protected] VAT 1. Purchaser: Clear identity and track record of the purchaser We understand the property is not elected for VAT. 2. Purchase Price: Price to be provided in words and figures Charlotte Holdsworth 3. Due Diligence: Confirmation of due diligence that has been DD: 020 3761 3635 Proposal undertaken including inspections [email protected] Our client is seeking unconditional offers in excess of 4. Approvals: Confirmation the offer has all necessary £4,000,000 (four million pounds) subject to contract approvals or details of the timing and process to Darryl Stevenson for the freehold interest with vacant possession. obtain these approvals (if required) DD: 020 7297 6277 5. Conditions: Any conditions attached to the offer to be [email protected] Inspection Dates clearly set out Open inspections will take place on the following 6. Timescales: The purchaser's best timescales for exchange and completion times and dates: Bidwells 7. Proof of funds: Proof of funding for the purchase Wednesday 14th November 10:00 am - 12:00 pm 25 Old Burlington Street 8. Solicitors Details: Confirmation of the purchaser’s legal and London W1S 3AN Wednesday 21st November 2:00 pm - 4:00 pm professional team Tel: 020 7493 3043 Wednesday 28th November 10:00 am - 12:00 pm November 2018

10 Bidwells 25 Old Burlington Street London W1S 3AN Tel: 020 7493 3043 bidwells.co.uk

IMPORTANT NOTICE RELATING TO THE MISREPRESENTATION ACT 1967

Bidwells LLP act for themselves and for the vendors of this property, whose agents they are, give notice that:

These particulars do not form part of any offer or contract and should not be relied upon as statements or representatives of fact. Bidwells LLP have no authority to make or give in writing or verbally any representation or warranties in relation to the property. Any areas of measurements or distances are approximate. The text, photographs and plans are for guidance only and are not necessarily comprehensive. No assumptions should be made that the property has all necessary planning, building regulation or other consents. Bidwells LLP have not carried out a survey, nor tested the services, appliances or facilities. Purchasers must satisfy themselves by inspection or otherwise. In the interest of Health & Safety, please ensure that you take due care when inspecting the property.

Bidwells LLP is a limited liability partnership registered in England & Wales (registered number OC344553). Registered head office is Bidwell House, Trumpington Road, Cambridge CB2 9LD, where a list of members is available for inspection. September 2019 Independent Viability Review, for, London Borough of Lewisham

Appendix C

Johnson Associates construction cost assessment (See Attachment)

GL Hearn J:\Planning\Job Files\J041374 - Mayow Road, Lewisham\8. Project Correspondence\Viability Report\12112019_Mayow_Road_Indepedent Viability Review.docx

MAYOW ROAD LONDON SE23 2XG FEASIBILITY COSTING EXERCISE

30 September 2019 Revision 00

OPTION SCHEME 1 Quantity Unit Rate Total £

1.00 Block A - Private Sale 1.01 Privare sale 1,913 m² 1,950 3,730,350 1.02 Plant room / cores / BoH. 0 m² 650 0 GIA 1,913 m²

2.00 Block B - Affordable Rent 2.01 Affordable rent 1,080 m² 1,800 1,944,000 2.02 Plant room / cores / BoH. 0 m² 650 0 GIA 1,080 m²

3.00 Block C - Private and Intermedialte rent 3.01 Private and Intermediate rent 2,177 m² 1,900 4,136,300 3.02 Plant room / cores / BoH. 0 m² 650 0 GIA 2,177 m²

Total GIA 5,170

4.00 Abnormals 4.01 Demolition of existing former school building. 906 m² 80 72,480 4.02 Allowance for external landscaped soace 1 Item 750,000 750,000

SUB-TOTAL £10,633,130

5.00 Preliminaries 5.01 Preliminaries 14% 10,633,130 1,488,638

SUB-TOTAL £12,121,768

6.00 Contingency & Inflation 6.01 Contingency 5% 12,121,768 606,088 6.02 Inflation - current day procing (3Qtr 2019) 0% 12,727,857 0

TOTAL COST (Rounded to nearest £1,000) £12,728,000

Total GIFA: 5,170 m² Cost Per m²: £2,462 No of appt 59 Assumptions / Notes Cost per appt £ 215,728.81 1. All pricing approximate and subject to scheme / detailed design. 2. Based on Stockwool Architects Area Schedule rev C dated July 2019.. 3. Pricing at 3Q 2019 rates. 4. Professional fees excluded. 5. VAT excluded. 6. Costing should be treated as provisional at this stage pending further details. 7 Bellway Cost Plan - £11,985,985 plud 5% Contingency £599,299 = £12,585,284.

Page 1 of 1 September 2019 Independent Viability Review, for, London Borough of Lewisham

Appendix D

Argus Developer Appraisal Summary

(See Attached)

GL Hearn J:\Planning\Job Files\J041374 - Mayow Road, Lewisham\8. Project Correspondence\Viability Report\12112019_Mayow_Road_Indepedent Viability Review.docx

Mayow Road - FVA

Development Appraisal GL Hearn 03 October 2019 APPRAISAL SUMMARY GL HEARN Mayow Road - FVA

Summary Appraisal for Phase 1 Phase 1

Currency in £

REVENUE Sales Valuation Units ft² Rate ft² Unit Price Gross Sales Private Residential Sales 44 30,705 602.95 420,769 18,513,846 Intermediate 7 5,077 357.61 259,347 1,815,427 London Affordable Rent 8 6,308 224.90 177,323 1,418,587 Totals 59 42,089 21,747,861

NET REALISATION 21,747,861

OUTLAY

ACQUISITION COSTS Residualised Price 2,216,516 2,216,516 Stamp Duty 72,128 Agent Fee 1.50% 33,248 Legal Fee 1.00% 22,165 127,541 CONSTRUCTION COSTS Construction ft² Rate ft² Cost Construction 55,622 ft² 217.93 pf² 12,121,768 12,121,768

Contingency 5.00% 606,088 Mayoral CIL 166,524 Borough CIL 249,785 1,022,397

PROFESSIONAL FEES Professional Fees 10.00% 1,212,177 1,212,177 MARKETING & LETTING Marketing 1.00% 170,111 170,111 DISPOSAL FEES Sales Agent Fee - Private Sales 1.50% 277,708 Sales Agent Fee - Affordable 1.00% 32,340 Sales Legal Fee - Private Sales 44 un 750.00 /un 33,000 Sales Legal Fee - Affordable 0.25% 8,085 351,133 FINANCE Debit Rate 6.000%, Credit Rate 0.000% (Nominal) Land 269,706 Construction 462,808 Other 92,361 Total Finance Cost 824,875

TOTAL COSTS 18,046,519

PROFIT 3,701,342

Performance Measures Profit on Cost% 20.51% Profit on GDV% 17.02% Profit on NDV% 17.02%

IRR 26.77%

Profit Erosion (finance rate 6.000%) 3 yrs 2 mths

Project: J:\visualdeveloper\Data\LB Lewisham\Mayow Road\Mayow Road - FVA 031019.wcfx ARGUS Developer Version: 7.50.001 Date: 03/10/2019