Creating value in suburbia
The place potential of well connected areas of metroland makes possible value uplift associated with the Supurbia vision. According to Savills, the gross development value generated by homeowners who club together to develop their plots could be as much as 60% - a considerable incentive for change.
The place potential of well-connected areas of metroland makes possible value uplift associated with conversion to Supurbia significant.
The map below shows Savills model of value uplift potential in London, it shows some of the greatest potential is in suburban outer London.
This map shows the difference between the modelled potential flat values and existing flat values. The darker the red areas, the greater the potential for regenerative development to unlock market value uplift and achieve the modelled flat values. In these areas, there is likely to be a barrier to reaching higher values. In order to achieve value uplift, this barrier will need to be removed. There needs to be a catalyst to remove this barrier, which could be either a transport improvement or high standard placemaking. The creation of Supurbia from Suburbia may be part of this.
The places in closest proximity to central employment locations are likely to see value uplift before more distant locations so it would seem best to locate the parts of metroland that are closest to faster transport nodes.
The map below shows Savills model of value uplift potential in London, it shows some of the greatest potential is in suburban outer London.
This map shows the difference between the modelled potential flat values and existing flat values. The darker the red areas, the greater the potential for regenerative development to unlock market value uplift and achieve the modelled flat values. In these areas, there is likely to be a barrier to reaching higher values. In order to achieve value uplift, this barrier will need to be removed. There needs to be a catalyst to remove this barrier, which could be either a transport improvement or high standard placemaking. The creation of Supurbia from Suburbia may be part of this.
The places in closest proximity to central employment locations are likely to see value uplift before more distant locations so it would seem best to locate the parts of metroland that are closest to faster transport nodes.
London’s value uplift potential
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London’s Density potential
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In addition to this place potential, the potential increase in housing density means gross development values (GDVs) per hectare should increase substantially.
A worked model of the Supurbia site shows that using a conventional developer model to achieve it yields a lower, though not unrespectable margin of 21% after the costs of land acquisition and development. Land acquisition under conventional models would however be lengthy, difficult and fraught with problems. If one landowner is unwilling to sell, it could scupper the whole scheme and cost a great deal of money. Significant premiums would probably need to be paid for units in order to incentivise owners to sell. If owners themselves are incentivised to club together in groups around each building group of, say 8 properties, the uplift they could see on the gross development value of their new buildings could be in the region of 60%. This is because they would not have to acquire their site. As owners, they would be landowner developers. |
The table shown is a roughly worked case study of the Supurbia site and shows that the density uplift is significant (from 25 units per hectare to 59 units per hectare) and that, even without place quality uplift, the potential returns to the owners of the typical 3 bed semis in the area should be significant enough to act as a strong incentive for development.
This begs the question as to what sort of development vehicle would be needed for owners to realise this uplift. Three elements would appear essential:
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© Supurbia HTA © Semi-permissive PTE report design by Lucy Smith / HTA website design by Tim Metcalfe / Pollard Thomas Edwards |
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