At Galliard Homes, where I am currently Director of Land, we recently reached the best and final bid stage for a development site. The development would have consisted of redeveloping an existing school to make it fit for 21st century education, alongside the delivery of much needed residential properties. Sadly, we were not successful, however it did get me thinking about the potential across London.
Before I worked for a developer, I was a land agent, always looking for the next site to sell to the most competitive developers. One of the smoothest transactions I was involved in was the sale of a building in Camberwell that was purchased by the Education Funding Agency, now LocatED, who had outbid residential developers to build a school; the school was a conversion of an existing three-storey building. I was then offered a site in Bromley which had planning refused for what would have been the tallest school in Britain at 10-storeys in height.
Many major cities across the globe have invested in high-rise modern schools that sit alongside well-designed housing developments. My previous work, and the recent bidding exercise, suggest that schools could have a major role to play in solving the UK housing crisis. A large proportion of local authority owned land consists of aging low-rise schools on large plots of brownfield land. These sites offer the possibility to develop new fit-for-purpose educational facilities alongside well designed homes. However, for this to work, we need the right investors. Enter the institutions.
At Galliard Homes, we have forward funded a number of schemes for PRS, including Greystar’s first acquisition in the UK and are currently progressing a number of single-family housing transactions and long leases of completed stock to Local Authorities. The investment in this sector has grown, across the delivery of private and affordable housing, and will de-risk a scheme to assist in speeding up housing delivery. Many of the institutions also have strict ESG criteria, working with the sector to get to net zero by 2030.
This is where two worlds of education and construction can collide to help solve the housing crisis. According to the British Educational Suppliers Association (BESA) there are 24,323 schools in the UK Local Authorities and other landowners of schools could maximise the potential of their land holdings by working with developers and PRS funds to build new schools in collaboration with new housing stock. This stock could also be leased back to the local authorities, another way for local authorities to speed up housing delivery and providing much needed housing in their Borough, of which there will likely be good demand by the institutions given the convent strength of the lease.
Although many local authorities have set up their own development companies, having no development risk in a time of build cost rises, being able to make a profit on rent received vs rent paid for competed units, as well as getting the units given back at the end of the lease, is likely to have more appeal.
If you can put together the capital that is looking to invest in the PRS sector, local authorities looking at ways to improve dated educational facilities and speed up the delivery of private and affordable housing, as well the increasing requirements for social responsibility & investment, then you just need a developer who is able to work with a variety of stakeholders and specialises in securing planning and the delivery of such schemes.
As a private business with in-house expertise across the whole development process, including delivery, which is what institutions and local authorities often may not have, I hope we see more opportunities to work with local authorities and other educational landowners.
