International Feasibility competition Project Brief Development Site: Barangaroo South Precinct, Barangararoo The second International Feasibility Competition supported by Pacific Rim Real Estate Society (PRRES) and sponsored by EstateMaster is based around the new headland site of Barangaroo located on the western edge of the Sydney CBD. Background Information Barangaroo is the future of Sydney. It is being created as a landmark for our economic future and to give people maximum access to the harbour. It will become a spectacular waterfront precinct and a place that everyone in NSW and Australia can be proud of. Valued at over $6 billion AUD, Barangaroo is Sydney's largest redevelopment project this century and will evolve over the next 10 to 20 years, injecting more than $1.5 billion AUD into the NSW economy annually. Barangaroo is located on the western edge of Sydney's CBD, on the shores of our world famous harbour. It is currently 22 hectares of disused container wharves. When complete, Barangaroo will showcase how city populations can live sustainably. It will create a new, 21 st century western face to our city. It will include the following: Six hectares of a new headland park, Busy public waterfront walks and parks, Commercial office towers and apartments, Serviced by new and extended transport systems.
Its design must be bold to make the most of this rare opportunity for renewal, rarely available to global city CBD's around the world. The site has been divided into three redevelopment area 1. the Headland Park, 2. Barangaroo Central 3. Barangaroo South. The focus of the case study for this competition will be on option 3 the Barangaroo South Precinct. The Northern Headland Park will feature: Restored naturalistic headland features which will balance with the other natural headlands it faces around the harbour A place for the public to relax by the harbour and in natural surroundings just minutes from the CBD A public foreshore walk will be provided, which will continue the length of the site and on to Walsh Bay and Darling Harbour The Barangaroo Central Precinct will feature: Barangaroo Central is the last remaining part of Barangaroo to be defined. It will have its own disctinct character connected to Barangaroo South and the Northern Headland Park. Combining commercial development with residential and retail. Your focus is on the Barangaroo South Precinct below: More about the Barangaroo South Precinct Barangaroo South will be the commercial centre of the site. It will feature: Commercial buildings with the large floor plates demanded in the 21st century by the international financial services industry Residential apartments that will ensure the site is vibrant and active seven days a week Barangaroo south is the heart of the site. As a home for creativity and innovation, Barangaroo south will also be a cultural and civic focal point for recreation, events and entertainment. Ideas and plans for this area are being gathered, considered and debated to ensure that our vision for a bold new place is realised.
Site Specifics The Barangaroo authority has detailed the following to be part of the site master plan Total Barangaroo site Barangaroo South mixed use precinct Commercial Retail, Food & Beverage Residential Hotel Transport Sustainability Community / Public Waterfront access Leasehold 22 hectares of former industrial land along the western harbour edge of Sydney s CBD 7.8 hectares, of which approximately 50% will be public space, with the remainder consisting of 490,000 sqm Gross Floor Area of mixed use - residential, commercial, retail and leisure Approximately 320,000 sqm GFA of unique harbour front office space predominantly located in three high rise office towers. Designed by internationally acclaimed architects, Lord Richard Rogers and Ivan Harbour, alongside some of Australia s leading architects, each tower sits on a three storey podium and offers large flexible floorplates (2,300 sqm+), great natural light and excellent views Up to 30,000 sqm GFA of mixed retail & leisure including convenience, lifestyle and fashion stores, cafes, restaurants, fine dining, casual eateries, bars and coffee shops Approximately 100,000 sqm GFA of mixed high-rise and low-rise residential arranged over eight buildings providing between 800-1000 apartments Landmark international hotel, with spa, business centre, bars, restaurants and retail (Note 1) Proposals include: direct pedestrian link to rail and buses at Wynyard and the CBD (Wynyard Walk), potential ferry wharfs, light rail link, bus routes, taxis, parking for bikes and cycleways Barangaroo will be Australia s first large scale carbon neutral community and one of the world s leading sustainable urban developments. The office towers will be Sydney s most sustainable high rise office buildings, targeting 6 Star Green Star v3 As Built ratings Barangaroo South includes cultural facilities as well public spaces such as a waterfront square, harbour cove, waterfront promenade, plazas, streets and laneways and a public pier The entire waterfront at Barangaroo will be fully accessible to the public All buildings on 99 year leases from the NSW Government More information What the site specifics do not say is that the scheme must be financially viable but must also strive to provide dwellings that are affordable to the majority. The development will be carried out by the private sector and will be funded by private finance. The public sector investment will be confined to the work carried out to date to decontaminate the site and provide services and the necessary infrastructure. The scheme will also be developing into a still uncertain economy, the fallout from the financial crisis in the Asia Pacific Region is still having sometime to run. The Australian economy is suffering low economic growth, poor business confidence and house prices have fallen considerably in recent years.
The developer bidding for control of the Barangaroo South site will have to produce a carefully considered development appraisal and financial feasibility study that meets the requirements of the Barangaroo Authority whilst still being financially viable for the developer. The site will be awarded to the developer that makes the highest bid for the site whilst also meeting the non-financial criteria laid down in the site specifics outlined above. What is required? 1. You are to put yourself in the place of an aspiring developer. You know the site and the market it is being developed into, you know the opportunity it represents and you know what the Barangaroo Authority want. It is up to you to model the development using Estate Master, a tool that is ideally suited to consider the complexity involved in this type of project. You will need to use your imagination to see what is possible, outlining the structure of the project and approximately what the layout and phasing might be. The key thing is, however, the financial aspects. Detail what are the returns likely to be? The project should be 100% debt financed to allow you look at the total project costs and the performance of the project without needing to raise the equity. Above all what is your final bid price for the site going to be? There are some ground rules. The Barangaroo Authority, their agents and legal team will be busy enough as it is without their workload being increased by dealing with enquiries from the teams. The project should therefore be completed only with the information provided in the site specifics provided with this assignment information. The teams are NOT to request the technical information on the site and are NOT to approach any of the following companies, HOWEVER you may like to review some of the roles included below as these could assist with your feasibility. Leading Architect Rogers, Stirk, Harbour and Partners Collaborating Architect Lend Lease Design Workplace Consultants Frank Duffy and DEGW Podium Facade Architects Rogers, Stirk, Harbour and Partners (C4 East and West) PTW (C3 East) Tony Caro Architecture (C3 West) Hassell (C5 East)
Tzannes Associates (C5 West) Planning Consultants JBA Planning Landscape Architects Aspect and Oculus Structural Engineer Lend Lease Design and Arup Facade Engineer Arup Mechanical and Electrical Engineer Norman Disney and Young Hydraulic and Fire Engineer Warren Smith and Partners Lift Engineer Arup and Lend Lease Design Fire Engineer Defire Building Ordinance and PCA McKenzie Group Sustainability Lend Lease Design DDA Consultants Morris Goding Accessibility Consultants Specialist Lighting Speirs and Major Residential R8 - Concept Architect FJMT Residential R9 - Concept Architect PTW Civil Consultants Cardno (NSW / ACT) Quantity Surveyor Rider Levitt Bucknall Geotechnical Services Coffey Geotechnics The submission should, however, be as realistic as possible as regards current market conditions in Sydney and those that a developer might reasonably expect to experience during the course of the development project. It should include a brief written report on your team s vision for the development showing how you intend to meet the Barangaroo Authority s vision for Barangaroo. Your feasibility should also incorporate an analysis of the project in financial terms as this will be presented to the board of directors of the development company, showing the following: Project Performance indicators and returns o Development Margin o NPV Positive or Negative? o Project IRR o Equity IRR The projects risk profile including sensitivity scenarios Recommendations as to the final bid price for the land.
o Utilising the residual land value analysis based on the Discounted Cash Flow Method. The financial data can be presented in any currency but that the bid for the land should be made in Australia Dollars Where do we find information? All information can be found using the internet. We have intentionally made this open to ensure an equal playing field for all competition entrants. The requirements of the submission are separated into two main stages. Stage one includes: Submit the Master Plan Full feasibility (Two models with different options, A Marketing analysis of how you would possibly market the project to the corporate board. These submissions will then be marked by a judging panel who will then decide on who moves to the next stage. Stage Two includes Students are then invited to compete in the second stage by presenting their proposal at the PRRES conference Produce marketing brochure distributed for all conference participants. Present a power point presentation on your project and its financial feasibility Ability to answer full detail requirements are provided below the assessment criteria
Assessment criteria The project submission will be assessed against the following criteria: How much the submission meets the defined requirements of the Barangaroo Authority The realism and comprehensiveness of the financial analysis. The financial data should be accompanied by a completed EstateMaster DF file. A summary of the project in a word document. Stage 1 Outline of the Master plan for Barangaroo 1000 words completed in a word processor Emailed to training@estatemaster.net with a PRRES competition cover sheet Closing date: Wednesday, 17 October 2013 What is required for stage 1? Student teams will provide: o Broad outline of your master plan and explanation of what you intend to develop onsite this should be done in your word document o Initial feasibility analysis of the site using Estate Master to produce the developer s summary sheet for analysis this should come from Estate Master DF o Marketing plan for the development with explanations on how you would market the development this should be in your word document examples could include the use of Video, Websites, Mail. Think clearly here about the type of market you are developing for The boundaries of the feasibility should include, but is not limited to the following: o Land Acquisition o Design, Planning and Consultancy Fees (Professional Fees) o Construction Costs o Contingencies o Statutory Fees o Land Holding Costs o Selling and Leasing Costs o Escalation or Inflation Rates o Pre-sales or Pre-commitments o Sales and Rental Income o Equity amount and timing o Finance structure Using the options and stages function within the Estate Master DF software o Students should produce an initial high level feasibility of the project outlining all of the different costs required and be the first option within Estate Master DF o Second feasibility with more detail provided showing all of the different developments costs and project costs outlined this will then become option 2 within the same Estate Master DF model. o The board would like to see both side by side in the consolidation sheet for analysis and judgement. Students should provide o An outline of their approach to their feasibility o Assumptions they are a making;
o o What is deemed value of the land What % of sales and or profit they will provide to the land owner (JV deal). What should you submit? Estate Master DF is the choice of financial models to demonstrate their workings. A three month trial will be provided with an option to extend to a full working model and licence once they have registered for the competition Free online certification training is also available to all members of the PRRES team. Word Document min 1000 words outlining the feasibility analysis and what changes have occurred since your initial feasibility. Don t forget that when a developer does a project like this, they will produce multiple if not hundreds of different models working through the different feasibility options. Estate Master DF file with two feasibility options stored within the Estate Master DF file. Now that you have made your initial presentation to the board with the following completed: Your full feasibility Master plan Marketing analysis Stage 2 (Final Stage) Word document Power point presentation (Limit of 10 slides in a hand out format) Electronic Marketing brochures to be made available for download for all of the delegates from the Estate Master website and Facebook page. Closing date (written documents): Friday, 13 December 2013 What is required for stage 2? Each team will be flown to PRRES conference (Christchurch 2014) where a mock interview will be undertaken by industry experts. The teams will present using hand outs to a public audience with each presentation as well as a power point presentation to present their proposals and giving a summary of the project. Requires more financial analysis with us providing financial details of their company (equity borrowing limits) and a shift in market conditions to accommodate in their modelling. o The finance structure, o Equity amount and timing will be added to the submitted stage 1 full feasibility. o Analysis behind the impact of the financial changes. Has your project changed at all? If the project has changed what are the reasons behind this change. Limited to 20 minutes per team to present and then 20 minutes to answer any questions from the conference attendees. The panel would include industry experts and chaired by Martin Hill The final winner will be based on their presentation and explanation of their assumptions to the panel. People s Choice: There will also be a People's Choice Awarded