URBAN DEVELOPMENT TRUST

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1 URBAN DEVELOPMENT TRUST Possibilities & limitations for Dutch Urban Area Development Boudewijn Stumpel 1 Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 1/ 26

2 CONTENTS INTRODUCTION CONCEPTS PRACTICES SYNTHESIS CONCLUSION Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 2/ 26

3 INTRODUCTION *Singapore Central Area *Rotterdam Kop van Zuid Why are new approaches for Urban Area Development (UAD) so important? *Amsterdam Zuidas *Shanghai Pudong Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 3/ 26

4 INTRODUCTION *London Green Enterprise District * Den Bosch Paleiskwartier Sustainability Why do Urban Area Development (UAD) fail? Feasibility *Heerhugowaard Stad van de Zon *Amsterdam GWL-terrein Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 4/ 26

5 INTRODUCTION *Shrinking City: Detroit *Globalisation: Silicon Valley *Climate change/energy consumption: Mexico City *Urban Decay: London, Robin Hood Gardens Mexico City Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 5/ 26

6 INTRODUCTION Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 6 / 26

7 INTRODUCTION Context Dutch Urban Area Development Van Joolingen, Kersten, & Franzen (2009) Gebiedsontwikkeling en de kredietcrisis De Zeeuw, Franzen, & Van Rheenen (2011) Gebiedsontwikkeling in een andere realiteit De Graaf (2011) Investeren in de ruimte De Zeeuw (2007) De engel uit het marmer Heurkens (2012) Private Sector-led Urban Development Projects Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 7/ 26

8 INTRODUCTION Main Research Question To what extent will the revenue model Urban Development Trusts (UDT) be able to facilitate the business model for successful UAD projects? Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 8/ 26

9 INTRODUCTION Research Methodologies Preliminary research Desk research Desk research Lesson-drawing Desk research Desk research Case-study research Desk research Document review Semi-structured interviews Site Observation Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 9/ 26

10 CONCEPTS Canvas model: business model generation *Osterwalder & Pigneur (2010) Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 10 / 26

11 CONCEPTS Business model for UAD projects 1. Theoretical framework 2. Analytical framework 3. Explanation BM according to canvas model 4. Explanation RV according to canvas model Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 11 / 26

12 CONCEPTS Real Estate Fund Industry Direct vs Indirect investments Sinking Fund Amortization Fund Company investment vehicle Unit Investment Trust Green Fund Real estate fund Guernsey Property Unit Trust Jersey Property Unit Trust Co-investment vehicle Separate Accounts Core vs Value-Added vs Opportunistic fund strategies Unit Trust Community Land Trust Single asset joint ventures Holding Fund Regional Fund Joint venture fund Limited Partnership fund Real Estate Investment Trust Target Fund Closed-Ended fund structure Environmental Fund Structural Fund Monumental Trust Unauthorized PUT Region Fund Property Unit Trust Commingled fund Endowment Funds Revolving by debt fund Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 12 / 26

13 CONCEPTS Dutch Real Estate Fund Industry Object level Area Level Characteristics Profit Non-profit Profit Non-profit Listed example REITs or FBIs - Development Trust - Common Development phase Operating - Development - Non-listed example Real Estate Funds Unit Trusts Endowment funds Sinking funds Common Development phase Operating Operating Operating Operating *Ontwikkelfonds N.V. : Fun Village Velsen - Amsterdam *Utrechts Monumenten fonds Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 13 / 26

14 CONCEPTS Theoretical Framework Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 14 / 26

15 CONCEPTS Key literature: successful UAD Hier auteurs vernoemen en daarna laten vervagen ipv de kernpunten Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 15 / 26

16 CONCEPTS Analytical Framework Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 16 / 26

17 PRACTICES Chiswick Park Business Model Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 17 / 26

18 PRACTICES Chiswick Park Enjoy-Work Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 18 / 26

19 PRACTICES Chiswick Park Revenue Model Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 19 / 26

20 SYNTHESIS Answering the research question To what extent will the revenue model Urban Development Trusts (UDT) be able to facilitate the business model for successful UAD projects? Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 20 / 26

21 SYNTHESIS Learned lessons: Offer area of business Similarities Value propositions Common objective Spatial quality Integral approach Demand-driven approach Current & future values Soft & hard qualities Differences Mind-sets No common paramount objective Unanimous point of view Submissive character sustainability Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 21 / 26

22 SYNTHESIS Learned lessons: Infrastructure area of business Similarities Aligning different interests Connect different type of resources Vertical chain integration Split developments Short-term & long-term perspectives Differences Only market stakeholder actively involved Integrate flows with real estate & use Horizontal chain integration Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 22 / 26

23 SYNTHESIS Learned lessons: Customer area of business Similarities All stakeholders are customers Iterations Involvement Secure vision & concept Action (channels) = reaction (relationships) Differences Submissive character of the state & civic society actors (indirect end-users) On behalf of the unit holders e.g.: Roles & responsibilities Control Action (channels) = reaction (relationships) Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 23 / 26

24 SYNTHESIS Learned lessons: Customer area of business Similarities Proportionally equal collecting & distributing costs & revenues among unit holders Reinvestments or refinance Soft values Differences Proportionally equal collecting & distributing costs & revenues among all stakeholders Cost-efficient Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 24 / 26

25 SYNTHESIS Conclusion Investors will only co-invest in Urban Development Trusts with like-minded investors The State, the Market & the Civic Society will not have the same investment beliefs & philosophy Therefore, it will not be realistic to incorporate an UDT to integrally develop, operate & manage an Urban Area by aligning the interests of 3 intrinsically different stakeholders through participation Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 25 / 26

26 CONCLUSION Overall conclusion: Three steps for a successful UAD project 1. Determine the current & future needs of the end-users 2. Define the value propositions of the business model; in line with those needs 3. Find an appropriate revenue model that will offer the most possibilities & the fewest limitations to implement and maintain those value propositions the various ways in which UDTs van be structured allows initiators to find an almost tailor-made revenue model that fits their context specific UAD project Boudewijn Stumpel Urban Development Trust: possibilities & limitations for Dutch Urban Area Development 26 / 26

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