New Land Investment Opportunities Scotland

Mactaggart & Mickel Ltd, formed in 1925, is a well renowned Scottish company that provides quality homes throughout Scotland.

At present, the company builds around 300 homes a year, ranging from one-bedroom flats through to 5/6-bedroom luxury detached homes. Our product range is varied catering for different sectors of the market and currently we have over 20 house types, with ‘Traditional’ and ‘Rural’ specifications. Although we have a number of houses types, each of them is approved and heavily influenced by the Board of Directors, some of whom are trained architects. Quality is a consistent component of all Mactaggart & Mickel homes and many of our customers are repeat purchasers.

Mactaggart & Mickel are also recognised by our colleagues in the housebuilding industry. ‘Homes for Scotland’ voted our development at ‘The Drum’, Bo’ness as the ‘Best Greenfield Development 2003’ and our sales consultant, Deborah Smith-Campbell, recently won a further ‘Homes for Scotland’ award – ‘Individual Award for Customer Service’. In addition a number of Mactaggart & Mickel’s site managers recently won NHBC quality awards for developments in Newton Mearns, Ayr and Largs.

Mactaggart & Mickel prides itself on its sound tradition of Scottish craftsmanship and attention to detail. A key theme of the company is not to rest on past successes. We train and employ local apprentices and facilitate the enhancement of existing skills through our training programme.

Not only is the company successful at developing on Greenfield sites, but also has experience of developing Brownfield sites. For example, the former Glasgow Caledonian University Halls of Residence is currently being redeveloped into 86 modern flats and townhouses also the former Babcock factory in Renfrew is in the process of its transformation into a new thriving community of over 150 homes. Currently under construction is our Netherton Gate development comprising 48 two bedroom apartments and 11 three bedroom townhouses offering a variety of styles. All flats have open plan kitchens and living spaces; our townhouses offer very flexible accommodation and have private gardens. A smaller site at Eskbank, Midlothian has been winning Council plaudits both in terms of design and density. We are also developer/landowners for much of the South East Wedge near Edinburgh, where mixed-use development is proposed along with 4,000 new homes. Mactaggart & Mickel can deliver both large and small projects in a variety of different locations.

To maintain our exacting standards of craftsmanship, we directly employ our own dedicated and experienced tradesmen, unlike many house builders who subcontract staff. We have 285 staff, 40 of which are office staff based at Atlantic Quay. In the last year we took on 11 apprentices in various trades. Through this scheme, young people have the opportunity to gain the relevant qualifications necessary to meet industry standards and to become experts in a trade. We believe our apprenticeship scheme is one of the most comprehensive and enjoyable within the industry.

SUSTAINABLITY

The Mactaggart & Mickel sustainability working party was formed in recognition of our responsibility to minimise the impact of our business operations on the environment.  This will be done through a variety of mechanisms including: minimising waste; responsibly sourcing materials; improving environmental awareness amongst our staff and considering the environmental impact when selecting and procuring new land.
Since setting up our in-house Sustainability Working Party on 31st January 07 we have already: 

· Commissioned a Waste Management Project with Envirowise on our sites.
· Implemented an Office Recycling Procedure.
· Initiated a switch over to low energy light bulbs in all of our new homes.
· Signed up to Scottish Power Green Tariff for power supply to all our new homes.
· Embarked upon an exercise designed to measure our 'Lomond' house type against the Code for Sustainable Homes (CFSH) which    will guide us in our future steps towards a 'carbon neutral' product.  

During 2008 we plan to: 

· Measure the success of the Envirowise Waste Management Project in terms of recycling and savings.
· Investigate further the potential use of micro-renewables in terms of efficiency and practicality for the homeowner.
· Identify areas where we can take our standard home to Code 4 on the CFSH.

It is anticipated that all of the homes proposed at Cumbernauld will be to Code 4 Standard which would include high standards of insulation, locally sourced materials in addition to micro renewables including solar panels and ground source heat pumps. Since acquiring M&M Timber Systems Ltd earlier this year, Mactaggart & Mickel are already able to offer significant benefits to the energy efficiency of our customer's homes. We are confident that this will continue over the year ahead as we introduce our own structurally insulated panel system

DESIGN STANDARDS

Mactaggart & Mickel’s reputation for quality and exacting standards is regularly recognised through wards for customer service and design such as Homes for Scotland Best Greenfield award for The Drum, Bo’ness. When it comes to raising the bar in terms of craftsmanship, breadth of innovation and attention to detail, these achievements inform our forward thinking for future project.

One of our particular design strengthens is the collective expertise generated by our board of directors, Derek Mickel is an architect/planner, Bruce Mickel, is a qualified architect and Andrew Mickel is a qualified planner. While we are closely involved in design we are also work with architectural consultants in order to gain outside input to design. One of the results of such collaboration is shown in the positive response to our Adain’s Brae development in Clarkston. While innovative in design is a key area, this is not simply for the sake of being new and different, but because it contributes to the sustainability, design and ease of use of the home. As we want our customers to be able to enjoy their homes, we are particularly committed to striving for zero maintenance in our homes which are built to last.

AFFORDABLE HOUSING

Outlined below is a summary of Mactaggart & Mickel's (M&M) shared equity / major home ownership scheme. This scheme was successfully implemented at our Drum development in Bo'ness and satisfied the Council in terms of our affordable housing requirement.

The shared equity scheme was only available to first time buyers and people living in Bo'ness who were looking for a new home. Falkirk Council was very supportive of the scheme which helped to create an award winning development at the Drum.  M&M hope to use our shared equity scheme to deliver the targeted 40 affordable housing requirement on this site in Cumbernauld 

The shared equity scheme offered by M&M allows customers buying a home from us to finance 80% of the purchase price. M&M will retain a 20% interest in the property for the first 10 years. The scheme allows people to purchase a property with a higher price than they might be able to afford if required to finance the full price at the time of purchase.

M&M's share is repayable on the 10th anniversary of the purchase date.  The amount is calculated at 20 % of the market value of the property at the time of repayment. The title of the property is in the name of the purchaser and they will enjoy full and exclusive rights of occupancy.  As outlined above we have previously targeted first time buyers and also people living in the area i.e. postcode preference.  

The SNP administration recently announced plans in its policy priorities to help first-time buyers get on the property ladder, through a mix of government grants, and shared equity schemes similar to that offered by Mactaggart & Mickel. The Communities minister Stewart Maxwell recently said: “I am particularly keen to work with private lenders and investors to help achieve more shared-equity homes for first-time buyers, by taking forward our manifesto commitment to create a Scottish Housing Support Fund.” It is our understanding that a shared equity scheme with housing associations was successfully trialled in Edinburgh over the past 2 years and is to be rolled out in 6 new Local Authorities area. Our proposal is similar however does not involve a Housing Association. 

The site at Dalshannon has been assessed by Keppie Planning for residential potential and we considered has good prospects to be allocated for housing. Representations have been made to the North Lanarkshire Council in support of the site in October 2007. Local plan now reviewed every 2 yrs. The new North Lanarkshire Local Plan requires 2000 homes to be identified in South Cumbernauld and should that not be possible within the location identified, part of this general area could be advanced through this process, which would further enhance the sites’ prospects. In summary, having assessed over 50 sites locally for Intelligent Investments we consider that this site represents an excellent rounding-off of Dalshannon and a sound location with good potential for release.

Gordon MacCallum
Keppie Planning
17/04/08

The Company, together with Keppies, or such other planning consultants as the Company may engage from time to time, will promote the land for:

I have been working over 30 years in the Scottish housing market both in private practice for the last 10 years and 20 years in Local Authorities at various levels.

The housing land position is at its most dynamic at this point in time as a number of key factors are combining to create the environment for significant housing release.

Recent statements by Ministers, both at National and Scottish Government levels, about the chronic affordable housing shortfall and the need to significantly increase housebuilding in Scotland from 25,000 to 35,000 units per annum, will require significant land releases and increased homebuilding rates. (The current rate is less than 25,000 per annum).

The new system of development plans will require to allocate land for at least a 20 year period in a phased basis and it is anticipated, for example, Aberdeen and Aberdeenshire will require to identify 80,000 units, Dundee and Highland at least 40,000 units and levels in the central belt are anticipated to grow by between 15 – 20%.

The momentum, for the first time in 30 years, has switched from development plan protection control policies to a new system that will require change and a clear dynamic to create new housing development, either as extensions of existing settlements, or new sustainable communities.

Authorities such as Aberdeen city, Aberdeenshire, Dundee, West Lothian, Midlothian, North Lanarkshire, Highland and Glasgow city have embraced the concept of new communities, whilst most of the others have plans for significant urban extensions, such as South Lanarkshire, Fife, North Lanarkshire., East North Lanarkshire., West Dumbarton and all 3 Ayrshire authorities.

The context for the new phase of Local Development Plans will be set in the framework of growth and looking forward for the next 20 years.

This time over the next 3 – 4 years will be central in identifying suitable and sustainable residential sites to promote through the development plan process. This is currently underway and is being tackled through the current crop of local plans leading into the new local development plans being prepared after October 2008 when the 2006 Act legislation comes into force.

There has not been a better time to invest in land and key searches provided it is professionally assessed and sites have a legitimacy in planning terms.

Keppie Planning are encouraging and advising their clients in the industry to investigate and establish positions/options on a range of sites throughout the country.

Intelligent Land Investments, as advised by Keppie Planning, are at the forefront of this activity and moving forward to the future by creating an attractive portfolio of sites some in partnership and some through shared ownership.

The Government’s policy of delivering affordable housing can only be achieved by allocating house land to enable the private sector to assist in delivering social/low cost housing, this further adds to the momentum.

At this point in time, investing in medium to longer term land taking a 5 to 10 year view has not been a more inviting proposition, especially with other investment options being less attractive.

Whilst Gordon MacCallum is a Director of Keppie Design, his comments are personal and based on his professional experience of the industry over the last 30 years.

Gordon MacCallum – Keppie  

The Company has engaged professional planning consultants, Keppie Design Limited, (“Keppies”) who have provided an assessment of the land and its suitability for redesignation for residential development and obtaining planning permission for the same.  Keppies will be responsible for presenting the strongest possible application to the local authority on behalf of the Company.  They are specialists in land redesignation and understand all the latest issues relating to planning guidance. They are also experienced at working with local councils in respect of the redesignation of Greenbelt and Greenfield land and they understand that to successfully lobby the local council for redesignation the Company must work closely with the local council. 

The Company, together with Keppies, or such other planning consultants as the Company may engage from time to time, will promote the land for:

All Councils in Scotland are required to prepare structure and local plans for their areas.  The structure plan and local plan show how much development may take place, where it will take place and where it is unlikely to be allowed.  They are the basis for decisions on planning applications.  They contain policies for the future development and use of land in an area.

The local plan is made up of a written statement and a proposal which:

Initial Stage

The process often begins with the Council issuing a consultative draft of the new local plan.  This is put out for public consultation. 

Publicity and Consultation

Before publishing a finalised draft, the Council issues a report assessing responses to the consultation draft.

Finalised Draft

After a statutory 6 week deposit period for making objections, the Council may enter into negotiations and make changes to remove objections to the plan.

Amendments

The Council then publishes amendments to the finalised draft.

Local Plan Inquiry

A Scottish Executive Reporter considers remaining objections at a local plan inquiry and recommends modifications.

Modifications to Finalised Draft

There is only a further inquiry after a 6 week objection period if new objections relate to issues not considered at the first inquiry.

Notice of Intention to Adopt

The Council adopts the local plan unless the Scottish Ministers intervene within four weeks of the notice of intention to adopt.

Keppies will actively promote the Site through the next review of the local plan as described above and shall be responsible for providing detailed information in support of a residential release for the Site at the various key stages of the local plan process to prove that the Site can be seen as a logical extension to the existing settlement of Lochwinnoch.

Keppies have, at the request of the Company, already produced a Framework Report which seeks to provide North Lanarkshire. Council with a document that explores the potential for residential development at the Site as well as the enhancement and consolidation of the existing entrance into Lochwinnoch to create a “gateway feature” that reflects the character of the village of Lochwinnoch.  The Framework Report will be submitted by the Company to North Lanarkshire Council at the earliest appropriate opportunity.

The strategy of the Company is simple:

The Company seeks to provide for Investors:

• 
  1) An opportunity for capital growth in the shares held by members;

  • 2) A secure investment in a quality site;

  • 3) A straightforward tangible investment.

The term of the investment will be the time between each Investor making his/her initial purchase of shares and the eventual sale of the Site or the shares in the Company.  It is not possible for the Directors to specify a time period within which this will be achieved.  Investors should be aware that while the Directors of the Company believe that there is a good opportunity that the Site may be redesignated at an early stage in the life of the Company, redesignation can often take up to 10 years, or more, depending on the results of the local planning meeting where the decision by the local planners as to the redesignation is made.

ILI, the founder member of the Company, will own approximately 14% of the equity in the Company and Keppies will own approximately 0.4% of the equity in the Company (all assuming the offer is fully subscribed). As ILI will own 14% of the entire issued share capital of the Company the Directors believe that the interests of all members of the Company will be aligned - to achieve an uplift in the value of the Site and hence the value of the shares in the Company and to maximise returns from the development or sale of the Site.