INTRODUCTION. Kier s Property division undertakes investment, development and asset management across a broad spectrum of property assets.

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1 KIER PROPERTY

2 KIER PROPERTY INTRODUCTION INTRODUCTION The Property division is an important part of the Kier Group where we are keen to utilise Group resources to continue to grow the business. Kier s Property division undertakes investment, development and asset management across a broad spectrum of property assets. Using the Group s wide resource base to enhance returns on property assets our property team has the ability to unlock potential. Working with our own extensive portfolio or in partnership with land owners we have the necessary skills to create value and deliver regenerative schemes. With the Group s strong balance sheet and a clear understanding of the United Kingdom regional markets further growth opportunities are required. Our business is broadly focused upon three key sectors; Investments, Development and Asset Management opportunities, where our expert knowledge can create value. With investments our focus has traditionally been on structured finance schemes to provide new public sector infrastructure projects, such as schools, libraries, and developments in the healthcare sector. Our track record as enabler, developer, contractor, long-term service provider and investor demonstrates the strong advantages of Kier s integrated business model. Across all these sector types Kier has shown an ability to secure new work against tough competition and deliver significant infrastructure projects across the country. Within the United Kingdom development sector Kier has built up an enviable track record of performance, driven by a determination not to overcomplicate the development process and deliver against key milestones for occupiers and investors. Adding value through the development process is key to achieving success in uncertain economic markets, and Kier s experience across all sectors of the commercial and residential development market provides a genuine capability. Our history also gives our customers the certainty that Kier is a long-term business partner who can be relied upon. Kier s financial strength underlies our performance with further and continued investments being made across the property sector to expand our current activities. We remain focused on further acquisitions. Nigel Turner, Executive Director of Kier Property

3 KIER PROPERTY CONTENTS An Integrated Approach 1 Kier Group 1 Corporate Responsibility 3 Risk Management 5 Case Studies: 01 Joint Venture 7 02 An Integrated Approach 9 03 Innovative Structures Partnerships Mixed-use Communities Structured Finance Bespoke Occupier Solutions Transforming Education Owner Occupiers Asset Management Residential Development Residential Regeneration Retail Regeneration 31

4 KIER PROPERTY INTEGRATED APPROACH, KIER GROUP PLC AN INTEGRATED APPROACH Kier is in a rare position to deliver major property solutions through a fully integrated development structure. As one of the UK s largest combined property, construction and services companies, with access to a wealth of resources and expertise. Kier can manage all aspects of projects, ensuring they are delivered on time and to budget, whilst achieving the highest standards. KIER GROUP PLC Kier Group plc is quoted on the London Stock Exchange and is a member of the FTSE 250 index. Through the strength of Kier s balance sheet, cash position and annual turnover, partners can be confident that Kier is a company of substance with a long track record of delivering success. In short Kier is a well established long-term business partner. The business operates through three divisions: Property Services Construction Kier Property invests, develops and asset manages across all sectors. These include office, industrial, retail, leisure, health, education, affordable, mixed tenure, private homes and mixed-use developments, undertaken directly and through joint ventures with both the public and private sectors. Our open, honest and transparent approach is important to the future of Kier s business. Clients are given the assurance that in a relationship with Kier they are dealing with a trustworthy partner. 01 DEFRA Headquarters, Whitehall, London

5 Develop With economic uncertainty many occupiers face critical decisions regarding the real estate they occupy. Through Kier s diverse development skills, tailor made property solutions can be provided, ensuring occupiers get the best value from their property. Kier s strong cash position also offers flexibility in the type of financial transaction proposed. This can range from leasehold, freehold, or in some cases legacy transactions where land exchanges are structured. Manage Kier asset manages for local authorities and other public bodies to obtain maximum value from property holdings whilst providing improvements in day-to-day real estate management. Kier is the strategic asset manager for a diverse property portfolio and actively manages a growing number of public sector assets. Invest Managing Kier s interests in serviced assets procured under structured finance Partnerships (PPP), we focus on providing an integrated solution, drawing on Kier s wider expertise and offering a one-stop solution to clients. Acting as promoter and developer and then as equity investor manager and facilities manager, our portfolio covers a wide range of sectors having delivered a total of 49 new facilities in the health, education, emergency services, care and libraries sectors. 02

6 KIER PROPERTY CORPORATE RESPONSIBILITY ESTABLISHING COMMUNITIES Our vision Taking a responsible and professional approach to business is central to all we do and our corporate responsibilty activity is embedded into and supports our core business, helping to improve our performance and regenerate communities. Our Corporate Responsibility (CR) strategy ensures that we design and manage buildings that integrate with their surroundings in physical and social terms and we pay particular attention to our environmental responsibilities. Business in the Community (BITC) CR Index has become the foundation for both our reporting and plan of action. We are benchmarked against both the industry at large and our peers through the six key areas shown opposite. We have shown improvement year-on-year. We tailor our CR activity to the needs of individual projects to ensure that it fully meets and supports local communities and aligns with the strategic needs of our customers. The culture of equality throughout Kier fosters an environment of co-operation and mutual respect wherever we work and underpins the high quality of our products and services. 03 Sharrow School, Sheffield

7 Considerate Constructors Scheme Environment & climate change Workplace health & safety Community engagement Workplace employees & training Marketplace customers & suppliers 04

8 KIER PROPERTY RISK MANAGEMENT RISK MANAGEMENT At every stage of the process, development can be challenging. At Kier we control development risk by careful management of the development process and an ability to solve problems rather than escalate them. Early identification of relevant issues enables the project team to work towards eliminating areas of risk, thus providing greater certainty, confidence and ultimately, improving value. Kier will take on the development risk to enable our partners to concentrate on their core activities in the knowledge that their occupational requirements are being met. Health & Safety Health & safety is of paramount importance to Kier. Each project is required to follow the Group procedures and standards which are enforced by a dedicated team of health & safety managers. All projects are monitored against key performance health & safety indicators. CASE STUDIES The following case studies demonstrate our successful approach. 05 St George s School, Broadstairs

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10 KIER PROPERTY SOLUM REGENERATION 01_ SOLUM REGENERATION JOINT VENTURE Kier and Network Rail have created Solum Regeneration, a joint venture company set up to upgrade and maximise the asset value of railway land. This ground breaking deal is now creating mixed-use developments adjacent to a number of rail stations within Greater London. Kier and Network Rail staff work side by side towards a common business plan. Network Rail had historically approached development on a property-by-property basis. The multiple site structure of Solum Regeneration creates a longer term working relationship for both parties with guaranteed capital receipts for Network Rail and a development pipeline for Kier. The main objective of the joint venture is to enhance development value over and above existing asset value and upgrade the stations. Working with occupiers, we have completed projects at Epsom, Walthamstow and Christchurch. Other schemes include Haywards Heath, Guildford, Redhill, Tonbridge, Bishop Stortford, Maidstone East, Borough Green and Surbiton. CLIENT: LOCATION: PROJECT ROLE: VALUE: Network Rail / Kier Property National Developer 500 million 07

11 David Biggs, Property Director, Network Rail Kier has been a great partner for this joint venture. Their approach and experience delivering worldclass developments complements our unique understanding of the railway. Together we will create landmark destinations, benefiting local communities and our passengers alike. solumregeneration.co.uk 08

12 KIER PROPERTY NORTH KENT POLICE HEADQUARTERS 02_ NORTH KENT POLICE HQ AN INTEGRATED APPROACH This new environmentally sensitive building represents part of the process of renewing the Police Authority s old Victorian estate. The three-storey building provides an impressive new divisional headquarters on the outskirts of Gravesend. It includes accommodation for up to 472 officers and staff, an evidential and lost property store and a custody suite of 40 cells, over 124,000 sq ft. The project benefits environmentally from a geothermal heat pump to aid space and hot water heating and was built sensitively, due to the close proximity to an aquifer and local abstraction point. This project represents the second PFI undertaken by the Authority and was constructed by Kier. Through our structured finance initiatives and equity investment, Kier has created a substantial Police HQ Centre. Without such an approach the Authority would not have been able to make the financial investment required to modernise the estate. The Kier one-stop integrated approach provided the Authority with certainty of delivery and a long-term investment relationship. CLIENT: LOCATION: PROJECT ROLE: VALUE: Kent Police Authority Gravesend, Kent Investor / Contractor 66 million 09

13 Peter Cox, Kent Police PFI Project Manager The benefits of having facilities to meet the needs of 21st century policing will be felt not just by every officer and member of staff but by the whole Kent community and will result in officers being freed up to deal with issues that really matter to local people. 10

14 KIER PROPERTY ORDNANCE SURVEY 03_ ORDNANCE SURVEY INNOVATIVE STRUCTURES The transaction with Ordnance Survey (OS) represents the unique and flexible relationship with Kier as developer. A key factor in financing this development was the ability of Kier to maximise value from the existing OS estate to partfinance the new BREEAM Excellent headquarters building. By concluding a single transaction with Kier for both the new headquarters and disposal of their existing site, OS has been able to avoid value leakage. The new HQ enables OS to introduce new working methods for its staff. The Kier team has worked very closely with OS and its advisers to ensure that the new building meets all the necessary occupational requirements, and uses the space available in an efficient manner. CLIENT: LOCATION: PROJECT ROLE: VALUE: Ordnance Survey Southampton Developer / Contractor 34 million 11

15 At Practical Completion Vanessa Lawrence CB, Director General and Chief Executive of OS I am looking forward to moving into Ordnance Survey s new home and seeing our staff settle in and enjoy their new working environment. I know everyone will enjoy working in the modern and dynamic building - one fitting Ordnance Survey s innovative and world-class business. 12

16 KIER PROPERTY WATFORD HEALTH CAMPUS 04_ WATFORD HEALTH CAMPUS PARTNERSHIPS This major mixed use project will be delivered through the local asset backed vehicle (LABV), which was formed in June 2013 to deliver the 240 million Watford Health Campus. This is a 20 year partnership between Kier, Watford Borough Council and West Hertfordshire Hospitals NHS Trust. Kier was chosen for their ability to meet the Council s vision for the Health Campus: To deliver a new quarter for west Watford, where uses and urban design compliment each other. It will provide new housing, jobs, community uses, better transport links and new hospital facilities. Utilising Kier Group s development expertise, ability to invest equity, and strong covenant to secure cost effective debt. Kier is working with its partners to regenerate 70 acres of land in west Watford. Developing a flexible, market facing masterplan with a mix of uses will maximise public sector land value and LABV returns which in turn will support much needed reinvestment in infrastructure and land remediation. The partnership will see the delivery of 375,000 sq ft of mixed use including: 650 homes; 140,000 sq ft of office space; a 25,000 sq ft foodstore; 50,000 sq ft of neighbourhood retail; 110,000 sq ft of light industrial space; a 120 bed hotel, energy centre and new road and green infrastructure. CLIENT: LOCATION: PROJECT ROLE: VALUE: West Hertfordshire Hospitals NHS Trust Watford Developer 240 million 13

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18 KIER PROPERTY OLD BATTLE HOSPITAL SITE 05_ OLD BATTLE HOSPITAL SITE CREATING MIXED-USE COMMUNITIES The scheme involved the development of 54 affordable homes and 11 open market apartments above a new 60,000 sq ft Tesco superstore. The former hospital site formed an important element of a wider regeneration programme to stimulate economic growth for the surrounding area. The programme for completion of the residential homes in relationship to the opening of the completed retail outlet was critical. Special attention to detail was required in respect of thermal and noise transmission issues, together with a co-ordinated fire strategy linking the retail store and the new homes. The project won the prestigious Housing Project of the Year at the Builder & Engineer awards. CLIENT: LOCATION: PROJECT ROLE: VALUE: Southern Housing Group Reading Investor / Contractor 6 million 15

19 Builder & Engineer, editor Ross MacMillan The Housing Project of the Year Award has always generated hundreds of entries, but few cut the mustard in terms of timely completion, sustainable design and, of course, building a habitable place to live in. Time and again Kier has ticked these boxes, and this year s winning entry the former Battle Hospital site was no different. 16

20 KIER PROPERTY HICHINGBROOKE TREATMENT CENTRE 06_ HINCHINGBROOKE TREATMENT CENTRE STRUCTURED FINANCE The project involves the provision of a striking, state-of-the-art, treatment centre at Hinchingbrooke Hospital, providing a full range of diagnostic and clinical support services. The two-storey, 91,800 sq ft facility was built by Kier Construction and Kier Services FM provides a full range of non-clinical services including cleaning, catering and portering. The centre provides diagnosis and treatment for 50,000 patients each year, and was designed taking into account the views of doctors, nurses and patients. The Centre won the NHS Innovation Award in the Design & Build category. CLIENT: LOCATION: PROJECT ROLE: VALUE: Hinchingbrooke Health Care NHS Trust Huntingdon, Cambridgeshire Investor / Contractor / Manager 85 million 17

21 Brian Gibbs, Trust FM Director The facilities services provider (Kier) has worked closely with myself and other members of the Trust s Facilities Directorate to ensure that the highest possible clinical services are available to patients. Because the PFI agreement results in a long-term relationship, it is important that good communication exists at all times and this has been our experience. 18

22 KIER PROPERTY RETAIL AND LEISURE 07_ RETAIL & LEISURE BESPOKE OCCUPIER SOLUTIONS Kier continues to develop a mixed retail portfolio, whether as part of a community scheme where local retail facilities are being offered on the high street, or for food and non-food developments. Our approach to development focuses on the occupiers requirements and a need to avoid over-complex development solutions wherever possible. Recent key clients include, John Lewis, Costco, Travis Perkins, Hennes, New Look, B&Q, Costa Coffee, Whitbread and Travelodge. CLIENT: LOCATION: PROJECT ROLE: Scottish Widows Swindon Developer VALUE: 10m 19

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24 KIER PROPERTY OLDHAM SECONDARY SCHOOLS 08_ OLDHAM SECONDARY SCHOOLS TRANSFORMING EDUCATION Working with public authorities, Kier is transforming the education of schoolchildren. Our ability to review projects as developer, long-term services provider and investor is unique. This ensures we create developments with enhanced value. Our desire is to establish durable and lasting partnerships. The designs feature large multi-function internal and external streets, a variety of teaching and learning environments and the inherent flexibility to meet the changing curricular needs in coming years. CLIENT: LOCATION: PROJECT ROLE: VALUE: Oldham Metropolitan Borough Council Oldham, Manchester Investor / Contractor / FM Provider 97 million 21

25 Hardial Hayer, Radclyffe head teacher Our school aimed to be the best in the country. It looked good on paper but the real thing is absolutely stunning and beyond our wildest dreams. It truly is a school of the future here today. 22

26 KIER PROPERTY TRADE CITY 09_ TRADE CITY OWNER OCCUPIERS Within the traditional industrial estate market Kier has created the Trade City brand. High quality industrial developments, in prime locations to suit owner occupier business needs. Understanding what occupiers want is the most important factor in the rapid success of the innovative Trade City concept. Trade City schemes focus on the occupier, offering flexible and bespoke solutions coupled with value for money. So far, over one million sq ft of Trade City schemes have been developed. A large proportion of these have been purchased by owner occupiers. Kier continues to expand the Trade City brand, seeking and acquiring additional sites in locations across the UK. Part of Kier s attraction in this market is the ability to offer both freehold and leasehold buildings, thus allowing more flexibility for the end user. Romford Frimley Feltham Waltham Cross Bracknell Chelmsford Enfield Weybrid 23

27 ge Hemel Hempstead Swindon Sydenham Exeter Uxbridge Sunbury Hayes 24

28 KIER PROPERTY WALWORTH BUSINESS PARK 10_ WALWORTH BUSINESS PARK ADDING VALUE THROUGH ASSET MANAGEMENT Kier has been selected as asset manager and development partner for Test Valley Borough Council, which wanted to enhance asset management services within its existing estate and stimulate regeneration and development opportunities. A local office is now open to ensure Kier has a presence on site. Through active asset management and developing vacant plots, Kier s aim is to increase the Council s income and regenerate a key core employment area for Andover. Plot 27 has recently been redeveloped by Kier. The warehouse unit, last occupied in 2004 has been split in half and refurbished in two units of 19,000 sq ft each with a private yard and access point. CLIENT: LOCATION: PROJECT ROLE: Test Valley Borough Council Andover, North Hampshire Asset Manager / Development Manager 25

29 Peter Giddings, the Borough Council s Economic Portfolio Holder added: This is another way in which the Council is committed to improving economic growth in Test Valley by revitalising the Walworth Business Park. I am pleased we have signed a partnership contract with Kier who have satisfied us that they have the expertise to see big changes happen soon. 26

30 KIER PROPERTY RESIDENTIAL DEVELOPMENTS 11_ SHORTERS AVENUE, BIRMINGHAM RESIDENTIAL DEVELOPMENTS Kier is an established house builder with a strong regional focus. Currently developing over 500 units nationally in the private and mixed tenure sectors. With our commercial and residental development skills Kier is now leading the way in major urban mixed-use regeneration. CLIENT: LOCATION: PROJECT ROLE: VALUE: Waterloo Housing Association Shorters Avenue, Billesley, Birmingham Developer / Contractor 8.6 million 27

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32 KIER PROPERTY RESIDENTIAL REGENERATION 12_ NEWCASTLE- UNDER-LYME RESIDENTIAL REGENERATION Kier, as development manager, can facilitate regeneration of areas in Knutton & Cross Heath by the residential redevelopment of a heavily contaminated Homes & Communities Agency brownfield site. Through the Agency s Kickstart initiative, Kier obtained gap funding for remediation and infrastructure of the whole Lower Milehouse Lane site as well as affordable housing funding which enabled a financially viable scheme. Kier negotiated a JCT Design and Build Contract with a local Registered Provider, Aspire Housing Trust, on the delivery of the Phase I affordable housing element. Kier funded the development of Phase I and delivered 72 affordable and 8 open market homes within the programme and on budget. The development illustrates Kier s core skills as developer to manage the different land owner and occupier requirements, working towards a common set of objectives on what would otherwise be a non viable scheme. All parties have commended the end result and work has now commenced on Phase II. CLIENT: LOCATION: PROJECT ROLE: VALUE: Aspire Housing Lower Milehouse Lane, Newcastle-under-Lyme Developer / Contractor 11 million 29

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34 KIER PROPERTY BELL GREEN RETAIL PARK, SYDENHAM 13_ BELL GREEN RETAIL PARK SYDENHAM RETAIL REGENERATION The wider Sydenham site, totalling 13 acres, was purchased competitively from National Grid. Kier has since developed a 120,000 sq ft bulky goods retail park on the majority of the site. The remaining 2.5 acres is being developed speculatively for a high quality Trade City scheme, comprising 75,000 sq ft of trade counter industrial space. Sydenham has a large catchment area which has a limited supply of new, good quality industrial units and therefore this scheme caters to both local and national trade operators. Phase I of the development was constructed as part of the retail scheme and totals 19,000 sq ft over four units. These units were let to occupiers such as Halfords Autocentres and the Wolseley Group (trading as the Plumb Centre). Phase II comprised the remaining 54,000 sq ft of space and 33 percent of the scheme was pre-let to a Mercedes Benz servicing centre. The remaining eight units were constructed with the absence of mezzanine space to give future occupiers flexibility for their trading requirements. Also as part of the development, a number of electrical car charging points were provided to encourage sustainable travel. CLIENT: LOCATION: PROJECT ROLE: VALUE: National Grid Bell Green, Sydenham Developer / Contractor 56 million 31

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36 CONTACT_ Kier Property Ltd 6 Cavendish Place London W1G 9NB t w kier.co.uk w trade-city.co.uk