Savills Marketing Report King’s Keep Development
Prepared by Toby Greenhow For Mrs Hattie Bacon 29th April 2010
Contents Your objectives Development description Market conditions Our recommendations on price Target buyers Strategy and timing of sale o
Marketing strategy
o
Pre-launch
Marketing recommendations o
Our objectives
o
Show home and marketing suite
o
Brochures, floor plans, CGI’s and photography
o
Internet & Digital marketing
o
E Campaign
o
Advertising
o
PR
o
Hoardings and signage
About Savills o
Residential Development, Consultancy & Sales
o
Responsive and creative
o
Savills Private Finance
o
The Savills team
o
Reporting
Preparation in readiness for sale Fees and Terms of Business Summary
Your objectives You have asked us to provide you with sales and marketing advice together with a schedule of pricing, for your proposed Castle Hill development in Cambridge to be known as King’s Keep.
Development description The development will comprise of 8 two bedroom luxury apartments, to be built over four floors, with one underground secure parking space per apartment. The development is located on Castle Street and is a short walk to historic Cambridge city centre.
Market conditions Savills has a market leading reputation for its research services, with a substantial research team that generate reports on all the latest local and national trends.
National Research To date the more favourable market in the second half of 2009 has carried through into 2010, with overall house prices across the UK growing by 1% in the first quarter of 2010. This has been led by London and the South of England, with equity rich housing markets seeing the highest levels of house price growth. Mortgage finance remains the biggest constraint to the market limiting the ability of those without considerable equity or cash to access the market particularly impacting on the first time buyer and investment sectors. Political and economic uncertainty has impacted on turnover levels in some markets however at the end of the first quarter 2010 we have reserved 25% more dwellings than at the same point in 2009. This comes at a time when, according to the RICS, there are signs of more stock coming to the market (albeit still very low by historical standards), which would suggest further short term volatility in house prices before we see a more sustained recovery in 2011 and beyond.
Local – The new build market Cambridge has escaped the worst of the economic downturn, helped in part by its reputation as a world class university city, underpinned by technology driven high-tech and bio-tech R&D companies which have proven more resilient to the economic slump. A recent report by The Centre for Cities highlights that 43.8% of the Cambridge workforce are employed in the highly skilled sectors of education, healthcare and research, with just 4.5% in manufacturing. Furthermore latest research by Oxford Economics reveals that Cambridge has the lowest national increase in ‘Job Seekers’ allowance, evidence of the low redundancy rates. There has been a marked increase in transactions in the new build sector in Cambridge, the charge led by cash rich investors taking advantage of stock units and rising rental demand. This has resulted in stock levels of new build property falling to an all time low, with a shortage of new starts in the foreseeable future only adding to the problem. Whilst we cannot rule out further price falls in the wider mainstream market, a slow and steady increase in mortgage availability including shared ownership schemes will assist recovery, and the outlook for Cambridge looks very positive.
Our recommendations on price
Plot
Beds
1
2
2
2
3
2
4
2
5
2
6
2
7
2
8 TOTAL:
2
Description
Floor
2 bed apartment 2 bed apartment 2 bed apartment 2 bed apartment 2 bed apartment 2 bed apartment 2 bed apartment 2 bed apartment
Lower Ground Lower Ground First Floor First Floor Second Floor Second Floor Third Floor Third Floor
£PSF
Price Range to
£PSF
Estimated Rental Values PCM
£395,000
£408
£415,000
£429
£1,300
915
£375,000
£410
£415,000
£454
£1,300
968
£395,000
£408
£420,000
£434
£1,350
1,173
£475,000
£405
£495,000
£422
£1,650
968
£395,000
£408
£425,000
£439
£1,400
1,173
£475,000
£405
£495,000
£422
£1,650
785
£350,000
£446
£375,000
£478
£1,300
947 7,897
£425,000 £3,285,000
£449 £416
£450,000 £3,490,000
£475 £442
£1,600
Sq.Ft
Price Range from
968
Views on price are not intended as a formal valuation and should not be relied upon as such. They are given in the course of our estate agency role. No liability is given to any third party and figures suggested are given purely as a guideline.
Target buyers We would estimate the target buyers for this development would be made up of the following: Young professionals, academia, buy-to-let investors, emotional investors (i.e. parents buying for student offspring) and downsizers.
Strategy and timing of sale It is vital to adopt the correct marketing strategy in order to achieve a successful campaign taking into account current market conditions.
Marketing strategy We would advise a 4-tier marketing strategy to take full advantage of the improving market conditions. Pre-Launch Prior to full details, brochures and prices being released we would announce the development as coming soon on the internet, in order to solicit early enquiries. A development board could also be erected at the same time to ‘name gather’. Off Plan Launch We would launch the development off plan, to generate some pre-sales from buyers willing to commit early, with some selective local advertising. Show Home Launch A full launch would be scheduled to coincide with the launch of the show flat, with increased advertising and scheduled open weekends.
Stock Plot Sales If any units are still unsold at point of physical completion, then we would provide plot specific sales particulars for each, and focus the advertising on the individual units.
Pre-launch During this period we will start to build a targeted database of potential purchasers. This could include servicing any database of enquiries that you may already have. The development hoarding and website are excellent marketing tools to drive purchaser interest. Prior to any marketing the following will need to be in place: Service charge estimates Fixed floor plan layouts Final specification (this must include brands for main fixtures and fittings to give guide on quality) Schedule of saleable plots and release prices. HIPS/EPC’s/PEA’s Legal documentation ready for individual exchanges NHBC guarantee or equivalent (absolutely necessary for the council of mortgage lenders)
Marketing recommendations Below sets out our recommendations for the marketing your scheme taking into consideration our above strategy and timings.
Our objectives Savills aim is to achieve the highest price possible for your Development within your agreed time frame. The Savills applicant and contacts register links all our offices including the 75 UK residential offices and 18 London offices, so your property can be offered to national buyers regardless of which office they registered with. We have an automatic email alert system which matches every property to suitable buyers on a daily basis and ensures that a weblink to your property details is swiftly emailed to prospective buyers (unless they have opted out of this service).
Show home and marketing suite It is vital to design a high quality show home and marketing suite which will entice potential buyers into the development. We are able to recommend an interior designer who is able to assist with the preparation of these spaces. The marketing suite is one of the key areas to impress buyers and need to create a well designed and controlled environment.
Brochures, floor plans, CGI’s and photography We would recommend that your development benefits from a professionally designed brochure Once more, we work closely with external design agencies, and would be happy to recommend a suitable company.
Marketing Collateral could include: Host brochure and floor plan brochure Site specific web site On site hoardings Awareness marketing Local and national advertising
Internet and digital marketing Nearly 90% of the UK population use the internet as their preferred method of searching for properties and savills.co.uk is one of the leading estate agency websites with over 60,000 property searches conducted every day. This means you’ll have access to more buyers via our website when you market your property with Savills – quite simply, because we get more ‘hits’, you get more opportunities to sell. As well as appearing on the Savills website the property will also be featured on the following portals –
Impressively, Savills is the single most viewed agent on countrylife.co.uk.
savills.co.uk/newhomes In addition to your apartments being featured on our residential property search, it will also be featured on savills.co.uk/newhomes - our dedicated residential development site where we are able to showcase the development scheme as well as the individual dwellings also providing a platform for specific PR stories and highlighting launch events.
E-Campaign As part of our marketing campaign, we will design in house a series of E-Campaigns to be sent out to our database informing them of new show home opening or special incentives.
Advertising Advertising is an essential part of creating market awareness. Savills advertise in key local and national newspapers, magazines and publications which attract just the kind of buyers you’re looking for, often negotiating extremely favourable rates. For this development we would be responsible for a half page of local advertising every other week. We will recover any additional advertising costs from you when appropriate.
PR Savills is an acknowledged national leader in generating media coverage and, through our dedicated head office and regional PR teams, we are frequently asked to comment on property industry issues and trends, both by the national and key local press. Last year our clients’ properties featured on over 50 covers of national news papers and property supplements, and our properties and spokespeople received over 6,100 national and regional press mentions. There is a tangible benefit for you in this media coverage: because Savills is seen as a leading property authority, or ‘the voice of the industry’, we attract committed buyers who feel we can offer the type of property they are looking for and market insight they can trust. For clients, this simply means more opportunities to sell their property.
Sale boards and hoardings Sale boards and hoardings are essential and a highly useful tool in generating enquiries. We would suggest that a board is erected at the time of pre marketing directing enquiries to our offices
About Savills Savills is one of the worlds leading international property advisory groups. It has an extensive network of over 200 offices and associates throughout the UK, continental Europe, the Americas, Asia Pacific, Africa and the Middle East. Savills is listed on the London Stock Exchange and employs approximately 20,000 staff worldwide. Savills is a market leading brand, which has recently been ranked the best Business Superbrand in the Real Estate advisory sector for the fourth consecutive year. The survey, conducted by YouGov for Business Brands, is scored by a panel of over 1,500 business professionals. Our brand is paramount to our success and will add profile to your Development, and make the scheme stand out from the competition. Additional to our network global offices network, you can benefit from our network of over 100 offices in the UK and Ireland. In addition we have a Russian desk based in our Knightsbridge office and a series of overseas desks focussing on China, Hong Kong, Singapore and Malaysia to target buyers from these particularly active sectors of the market, although not as relevant for your particular project. Locally, our Cambridge Office offers a range of services including: Residential
Commercial
Residential Sales New Build Sales and Consultancy Residential Investment and Ground Rent Sales Residential Lettings Development Planning Affordable Housing Valuation and Consultancy Transport Planning Urban Design
Management Investment Office Agency Retail (In and Out of Town) Landlord and Tenant Valuation
Residential Development, Sales & Consultancy Savills is a leading specialist new homes agency in the UK with 18 dedicated regional teams. In the period 2006 – 2009, we exchanged contracts on over 6,000 private new homes worth £33bn. th benchmarks our business, by volume of private sales, alongside the 6 largest national house builder.
This
Our services are wide ranging but include consultancy at the earliest point in the development cycle advising on unit mix, specification and layouts through to the sales and marketing services of the finished product. Our Clients include most major house builders, mixed use specialists, and niche regional developers across our operating regions. We have additional specialist knowledge within such areas as retirement housing, bulk forward and portfolio investment and RSL private sales. We operate across all price ranges and product types within our operating areas.
Responsive and Creative In the latest client survey 91% of respondents confirmed that Savills had provided innovative ideas and suggestions to mitigate market conditions, 100% felt that their needs were fully understood and 91% would recommend or use us again The graph below illustrates the main reasons why our clients chose to instruct Savills for their developments. 35% 30% 25% 20% 15% 10% 5% 0% The quality of our key staff
Constantly Improving
Our reach and marketing power
The wider benefits of the Savills brand
The fee
Every year we mystery shop ourselves, benchmarking ourselves against previous performance and the industry. This informs our training strategies, allows us to reward superior performance and keeps us on our toes, after all every enquiry is an opportunity for a sale!
Savills Private Finance - Financing your development Savills Private Finance (SPF) is one of the UK’s leading independent mortgage brokers. Our team of advisers have specialist knowledge in providing commercial development finance for a variety of projects. Whether you are starting a new build construction project or converting existing properties, we can help. We will endeavour to find the right lender who is best suited to your requirements. Development finance will depend on the basis of the proposition and your experience. Our specialist advisers have the experience to assess the viability of the project and help you present the application to the appropriate lender.
Once the development is completed SPF can help your buyers. We have often found that arranging a pre-site valuation is invaluable in giving comfort that the agreed sales price will be confirmed by a valuer when instructed by the purchaser. Being independent SPF are able to find the best mortgage for your clients, and importantly for you, in timely fashion, thus helping to avoid failed exchanged contracts or protracted completion dates. In addition to mainstream residential and buy-to-let funding, SPF has a specialist division that focuses on the Shared Ownership sector.
The Savills team We pride ourselves in having some of the best staff in the profession. We look for the same three qualities as those which you are hopefully looking for in an agent: a leading expert in your type of property, considerable negotiation skills, and of course a strong sense of professional ethics. It is highly unlikely that any problem you may encounter is not one we have already faced or overcome! The huge depth of experience and expertise from the entire Savills group is at your disposal.
Reporting We generally recommend a formal meeting with our client every month in order to update you on marketing activity and feedback over that period, and allows us to set the strategy for future marketing. We will also update you and your team regularly by email. Having operated on a specialist dedicated discipline within Savills for many years, we have established best practices, training courses, and operating manuals. This means that we can bring to each instruction a set of common standards and procedures smoothing the entire sales and management process.
Preparation in readiness for sale Before the Development can be offered for sale and marketing can commence, the HIP, which includes an Energy Performance Certificate (EPC) or Predicted Energy Assessment (PEA), must have been commissioned and be in our possession. We then recommend that this information is displayed on the brochure whenever possible.
Fees and Terms of Business Our formal Terms of Business will clearly set out fee levels and sales and marketing obligations. We would be most keen to discuss these, in detail, at the earliest opportunity. The Estate Agents Act requires that our instructions be confirmed in writing. Acting as your agents with sole selling rights our fee would be 1% of the sale price of each unit, exclusive of the agreed marketing charges and VAT. Included within this fee would be a schedule of regular local advertising; however national advertising would be excluded.
Summary We would be delighted to work with you in marketing the Kings Keep development and would draw your attention to some of the key reasons other clients have selected us: Our combination of motivated driven specialist New Homes experts working alongside a network of residential offices ensures that your development will receive the best possible profile and market exposure. We are passionate about selling New Build property as proven by our track record for delivery of results.
Savills brand will add profile and desirability to your scheme. Savills regularly outperforms other agents in terms of web hits, which will ensure that your Development will receive the profile needed to reach to the widest audience. Your planned development at King’s Keep is a fantastic prospect, offering residents an exemplary specification and location. We hope that we have covered the main points, but please let us know if there is anything else you need to know. We very much welcome the opportunity of working with you again.
Report Signed
Signed:
Toby Greenhow MNAEA Associate Director Head of New Homes Savills Cambridge 132-134 Hills Road Cambridge CB2 8PA
Date: 29/04/10