kier project investment project investment | 3. ... phil woods, associate director pip prongué,...

KIER PROJECTINVESTMENT

2 | Kier Project Investment

Contents

Introduction ..........................................................................5

Kier ‘at a glance’ ...................................................................6

Our team ..............................................................................8

Project history .....................................................................10

Student accommodation ......................................................14

Construction finance ...........................................................16

Renewable energy ...............................................................17

Civil infrastructure ...............................................................18

Housing ..............................................................................19

Case studies:

Education ...........................................................................20

Emergency services .............................................................22

LABV ..................................................................................24

Social housing ....................................................................26

Healthcare ..........................................................................28

Libraries .............................................................................30

Kier Project Investment | 3

Introduction

Kier Project Investment (KPI) manages Kier Group’s interests in service concessions

procured under the Private Finance Initiative and Public Private Partnerships.

KPI is responsible for the Group’s approach to these projects by acting as promoter and

developer and then as equity investor and operator. The portfolio includes projects in

the healthcare, education, emergency services, waste, care and libraries sectors. The

company’s broad experience gained through these numerous projects allows the team to

seek opportunities in new markets. As well as the existing markets, KPI is actively pursuing

projects in the student accommodation, civil infrastructure, street lighting and private rented

residential sectors.

We focus on providing a truly integrated solution, bringing together the skills and expertise

from across the Group to deliver greater value from our schemes and to our customers. This

‘one-stop shop’ approach allows the Group to demonstrate the full breadth of its capability –

from financing to construction and long term maintenance. Following the recent acquisition

of May Gurney, the Group has a greater exposure to new sectors including street lighting

and highways maintenance.

This brochure highlights KPI’s successes to date, gives an overview of a selection of projects

including those that we are currently bidding, and introduces you to the KPI team.

We are looking forward to discussing future opportunities with you.


HIGH ST BANKSHOP

Kier ‘at a glance’ Kier has the financial strength, the ability and the resources to adapt its offering of services to meet any customer’s requirements in the built environment. Our business is split into three key operating divisions.

■ UK Infrastructure■ UK Building■ Overseas

Construction by revenue 2013

■ Housing maintenance■Environmental■FM

Services by revenue 2013

■Property and PFI■Homes

Property by revenue 2013

Our divisions

Kier ConstructionThe Construction division encompasses our UK regional contracting, civil engineering and overseas businesses, which are highly skilled in the construction of the full range of building projects, together with power, waste and infrastructure facilities, transport, water and mining projects.

Kier ServicesThe Services division comprised three businesses: housing maintenance, which provides reactive and planned maintenance; environmental, offering waste collection services, the operation of a major recycling facility and grounds maintenance; and facilities management (FM).*

Kier PropertyThe Property division encompasses our property development, structured project finance and private and affordable homes businesses, and has a pipeline in excess of £1.5bn across our development and mixed-tenure housing activities.

Civil engineering> Earthworks> Foundations> Concrete works> Structural steel> Tunnelling> Remediation> Demolition> Regulated environments

Building> New build> Extensions> Modular> Design & build

Facilities Management> Total FM services> Technical solutions> Energy management> Integrated solutions

Housing> Private residential

Affordable housing> Mixed-tenure housing and

affordable homes

Living space> Care homes> High-rise affordable

housing> Student accommodation

Housing maintenance> Responsive, cyclical & planned maintenance> Aids & adaptations> Statutory compliance services> Refurbishment and capital work

Property development> Development portfolio in offices, industrial,

retail and mixed-use schemes> Managed fund development> Joint ventures, e.g. Network Rail> Waste to energy AD plants

Project investment> PFI schemes> PF2 schemes> Blue light, leisure, healthcare and housing

Asset Management> Strategic property asset management> Estates management> Property transactional services> Statutory compliance & maintenance

management

Fleet and passenger services> End-to-end fleet

management services> Passenger services

Utilities services > Maintenance &

enhancement in water, gas & power

> Mechanical & electrical maintenance

> Mobile telecoms inspection & maintenance

> Design

Waterways services> Canal & river maintenance > Flood protection – construction

& maintenance> Mechanical, civil & electrical

engineering

Interiors and refurbishment> Interiors fit out> Refurbishment> Renovation

Mechanical and electrical> Design, installation &

maintenance

Environmental services> Recycling & refuse collection> Household waste recycling

centres (HWRCs)> Street cleansing & grounds

maintenance> Refuse transfer & resource

processing

Engineering design> Temporary works design> Temporary works advisory services> Structural engineering design> Geotechnical services

Technical services> 3D Visualisation and 4D modelling> Alternative design solutions> Building information modelling (BIM)> Design completion and project services> Process delivery

Construction management> Programme management> Studies> Interface management

Mining> Coal surface mining, Scotland> Phosphate mining, Saudi Arabia

Energy solutions> Energy ECO-funding> Energy performance contracting> Photovoltaic production and installation> Biomass, CHP

Our capabilities and services

Kier relies on the latest technology, the brightest people and close collaboration to deliver advanced solutions in diverse fields.

Our markets

With our extensive experience in multiple sectors, Kier offers impeccable quality, competitive pricing and a history of successful projects.On every project, Kier depends on a strategic, consultative approach that often provides significant savings for our clients. And by getting to understand their needs we can help them achieve diverse goals – including environmental, social and health targets.While our Group offers the potential to reduce interfaces and costs, our regional businesses carry out projects – giving the feel of a small, local partner while drawing on local resources, but backed by the financial and technical resources of one of the UK’s largest construction, services and property organisations.

Public sectorKier works extensively with central government and local authority clients.

IndustrialFrom manufacturing plants to warehouses, we can help streamline industrial and commercial businesses.

InfrastructureDelivering technically challenging civil engineering and transportation projects around the world.

Leisure & hotelsProviding building and support services to the UK’s most prominent leisure brands.

RetailFrom single unit supermarkets to full retail parks, Kier can develop, build, fit out and refurbish.

Science & pharmaceuticalsKier understands the exacting needs of this specialist sector.

TransportKier has a wealth of experience in rail, port, highway and airport projects.

CommercialProviding corporate clients with dynamic solutions.

Defence & justiceFrom prisons to police stations, Kier helps clients meet tough targets.

EducationKier delivers and maintains a range of learning environments.

Energy & wasteWide ranging expertise from power stations to waste processing solutions.

HealthcareDeveloping solutions that centre around patients’ needs.

ResidentialKier creates living spaces and provides support to the social housing sector.

* Since the acquisition of May Gurney in July 2013, the enlarged Services division comprises seven main businesses: housing maintenance, environmental, FM, highways maintenance, utilities services, mainly water and telecommunications, fleet and passenger services, and waterways services.

Highways services> Highways maintenance> Surface dressing> Street lighting> Signage

Rail services> Structures > Property> Signalling> Professional

services

6 | Kier Project Investment Kier Project Investment | 7

Our team

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Alex Carr, Senior Financial Analyst

Aftab Rafiq, Senior Commercial Manager

Anna Pigott, Graduate Surveyor

Chris Hayward, Senior Bid Manager

Chris McCrave, Senior Commercial Manager

Duncan MacDonald, Senior Project Manager

Graham Fairbank, Associate Director

Helen Lloyd, Graduate Surveyor

Ian Benson, Financial Analyst

Jane Partridge, SPV Manager

Justin Cannon, Project Manager

Leeza Oldland, Team Secretary

Nick Shepherdson, SPV Manager

Nigel Turner, Managing Director

Phil Woods, Associate Director

Pip Prongué, Director

Stephen Ward, Bid Manager

Bob Gordon-Stewart, Finance Director

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Shahid Mehmood, Management Accountant

Ian Chapman, Financial Controller

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PROJECT HISTORY

1998 - 20121. Hairmyres Hospital, 1998

2. Neath Port Talbot Hospital, 2000

3. Bournemouth Library, 2000

4. Prospect Park Hospital, 2001

5. Tendring Schools, 2001

6. Greenwich Care Homes, 2002

7. Hinchingbrooke Treatment Centre, 2004

8. Waltham Forest Grouped Schools, 2004

9. Oldham Library, 2004

10. Sheffield Schools, 2005

11. Norwich Schools, 2006

12. GAC Ipswich Hospital, 2006

13. Oldham Schools, 2006

14. North Kent Police Headquarters, 2006

15. Kent Schools BSF, 2008

16. Police Investigation Centres, Norfolk & Suffolk, 2010

17. Gloucestershire Fire, 2011

18. South West Hub, Alliance Community Partnership 2012

201319. Watford Health Campus20. Staffordshire Fire21. London Fire22. Woking Housing 23. University of Salford

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Currently bidding

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> 1. Hairmyres Hospital

> 2. Neath Port Talbot Hospital

> 3. Bournemouth Library

> 4. Prospect Park Hospital

> 5. Tendring Schools

> 6. Greenwich Care Homes

> 7. Hinchingbrooke Treatment Centre

> 8. Waltham Forest Grouped Schools

> 9. Oldham Library

> 10. Sheffield Schools

> 11. Norwich Schools

> 12. GAC Ipswich Hospital

> 13. Oldham Schools

> 14. North Kent Police Headquarters

> 15. Kent BSF

> 16. Police Investigation Centres, Norfolk & Suffolk

> 17. Gloucestershire Fire

> 18. South West Hub, Alliance Community Partnership

> 19. Watford Health Campus

> 20. Staffordshire Fire

> 21. London Fire

> 22. Woking Housing

> 23. University of Salford

Site locations


Student accommodation

Kier Group has significant experience of working with Universities throughout the UK and has developed an unrivalled reputation for meeting the fast-changing needs of the Higher Education sector.

Kier has built up an enviable track record of performance within the Student Accommodation market; success is driven by determination to successfully deliver against clients requirements, to offer value for money and meet key milestones for all stakeholders. Kier Investment’s strength has been supported by closely working with our construction division to provide a fully integrated development structure.

We are able to further complement this approach through our relationships with dedicated student accommodation operators, in order to provide the end user with the best product and service through already established relationships.

KPI have recently reached Financial Close on a 1300 bed scheme with the University of Salford. The £65m project on the University’s Peel Park Campus provides en-suite accommodation, social and study areas and outdoor recreational space. We are also involved in a competitive dialogue scheme with another University.

Our objective throughout the procurement of any student accommodation development process is to work with the University to ensure that the student experience is at the heart of the project.


Construction finance

Kier Group in the last year developed a new offering to the market of providing financing solutions to our construction customers. In relation to construction projects with a strong exit route Kier is willing to provide finance to fund part of the construction costs, enabling these projects to go ahead.

KPI has utilised its significant investment experience to develop bespoke and in-house solutions for our client’s funding requirements. By the end of 2013 will have agreed loan agreements in relation

to 3 projects with a construction value of c. £38m and lending of c. £25m across residential, commercial offices and industrial developments.

Renewable energy

In August 2012 Kier Group invested £24.4m in Biogen, a leading company in the anaerobic digestion industry.

Biogen designs, builds, owns and operates commercial scale food waste anaerobic digestion (AD) plants, which process food waste to generate renewable energy and a valuable biofertiliser for farmland. Biogen source the food waste from households, high-street supermarkets and food manufacturers. This food waste is then put through the AD process, generating a methane-rich biogas which is converted into renewable electricity. What’s left is a valuable liquid crop biofertiliser which is used on local farmland. Biogen currently has the capacity to process over 100,000 tonnes of food waste per year.

Since Kier invested in Biogen the number of operational plants has increased to three. In addition to the two existing plants in Northamptonshire and Bedfordshire, a

plant has been built in North-West Wales for Gwynedd Council and a further three plants are under construction in Hertfordshire, Warwickshire and North-East Wales. Biogen plans to develop a national network of over 10 plants by 2017.

Biogen can efficiently manage the food waste element of Kier street collection contracts.

KPI has invested in photo voltaic (PV) panels which convert sun light into electricity; there are units in Harlow and Tunbridge Wells in addition to panels in place on Kier offices.


Civil infrastructure

KPI now actively seeks investment opportunities in the civil infrastructure sector (road and rail) and the renewable’s market. The complexities and challenges associated with these projects, allows KPI and the wider group can showcase their ability.

Projects that would call upon the expertise of Kier Major Projects and Kier Infrastructure and Overseas to deliver are on a scale that the financing needs (debt and equity) and the bid winning solutions may require the Capital markets alongside the debt market

to deliver. Kier Group’s balance sheet supports this and currently Kier is bidding for the Aberdeen Western Peripheral Route where the total funding required is in excess of £700m.

Housing

Another area KPI is seeking to grow lies within the residential housing sector, more specifically the opportunities around Private Rented Stock (PRS).

Kier believes it’s long standing working partnerships with local authorities through frameworks places them in a strong position to negotiate regeneration opportunities for local communities on brownfield sites that may otherwise remain unused. The Kent Initiative is a model that Kier is seeking to replicate throughout the UK to allow us to deliver much needed affordable housing to

the regions where it is most needed. We will continue to seek long term joint venture partners and/or institutional investors to work with them in developing a sustainable solution which creates value at all levels.

This area is managed by a specialist Regeneration Investment team.


Education Kent Schools BSF

The £650m BSF programme led by the KPI management team, is a Local Education Partnership (LEP) between Kent County Council (KCC) and Kier.

The Local Education Partnership has a wide range of responsibilities which extend from town planning approvals and sustainability matters through design, construction, IT installation and operation to the provision of equipment and furniture. Working closely with KCC, the LEP team and its partners have delivered 11 new and refurbished Secondary

schools and an Academy for the communities in North Kent. Three are PFI schools.

KCC’s educational vision is to provide modern and spatially efficient transformational buildings within which to deliver state of the art teaching, supported by the imaginative use of informational technology.


Emergency services Gloucestershire Fire

This project comprises four new community fire stations and a lifeskill centre, with stations in Churchdown and Tuffley replacing the old Gloucester fire stations at Eastern Avenue in Cheltenham. A new station was built at Uckington while the old station in Keynsham Road was demolished and rebuilt at that location, with a temporary fire station provided during the construction period.

The locations of the new stations were selected to improve average response times to emergency calls across the two areas. There was a major focus on reducing and preventing accidents through a new Community Life Skills Centre for Gloucestershire. The centre is based at the Shepherd Road site in Tuffley and is used by schoolchildren groups, communities and organisations across Gloucestershire.

It provides a wide range of practical risk scenarios including road, rail, fire, electrical and water safety as well as other dangers in the home, including slips, trips, accidental poisoning and internet safety. It also focuses on teaching young people about social responsibility and respect.

The blue3 consortium was led by KPI as a 70% investor in the SPV alongside Carden Croft (20%) and Reliance (10%) and the new facilities were delivered by Kier Construction.

We pride ourselves on delivering on time, to budget and to an extremely high quality, ensuring that our bid proposals are carried through to the finished product. This is demonstrated by these images, one of which was a CGI (inset) produced at bid stage and the other (main photo) is a photograph of the completed station.

The prospect of four new fire stations and a groundbreaking new Life Skills Centre is hugely

exciting. We take our commitment to keeping people in the county safe very seriously and this project will enable us to provide even quicker response times to emergency calls.

Cllr Will Windsor Clive, Gloucestershire County Council


LABV Watford Health Campus

This major mixed use project will be delivered through the local asset backed vehicle (LABV), which was formed in June 2013 to deliver the £240m 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.

This announcement marks a significant step forward for the Health Campus and brings us closer to seeing our aspirations for the area finally come to fruition. The Health Campus is a once in a lifetime opportunity. It will deliver significant benefits to the town and gives a huge boost to our local economy at a time when other areas of the country are seeing reductions to public investment and services. There is still a lot to be done but I am delighted at the prospect of working with Kier on its exciting proposals and getting the best possible results for Watford and our residents.

Dorothy Thornhill MBE Elected Mayor of Watford


Social housing Woking Housing

This project is for a single site mixed-tenure development of 373 homes. The scheme will deliver 224 new social rented homes for Woking Borough Council (WBC) under the PFI contract and a further 149 homes for sale by Kier Partnership Homes. There will be a range of property types and sizes in line with WBC’s demand for housing however, most will be family homes.

KPI and Thames Valley Housing (TVHA) will form a 50:50 special purpose vehicle (SPV) to contract with the Council. The PFI contract term is 28 years.

The PFI contractor will be responsible for the building and on-going management and maintenance of the properties and will enter into a D&B sub-contract with Kier Partnership Homes (KPH), a Housing Management contract and a Repairs and Maintenance contract with Thames Valley Housing Association (TVHA).

Senior debt funding and the residual value tranche funding will be provided by NordDeutsche Landesbank (NordLB).

All homes have been designed to achieve Lifetime Homes standards and Code for Sustainable Homes Level 4. Consequently the homes will have larger floor areas than houses that would normally be provided on a traditional residential development. This, along with the specified parking requirements, reduces the plotting density.


Healthcare Garrett Anderson Centre, Ipswich

The Garrett Anderson Centre opened in 2008 and provides a 9,000 sq m extension to the existing acute hospital at Ipswich.

The four-storey building has provided the following departments:

Accident and Emergency 19 treatment rooms for adults, 4 treatment rooms for children, resuscitation room for 5, two x-ray rooms and other supporting facilities

Critical Care 22 beds (18 located in bays, 3 adult singles and 1 paediatric single) and storage and clinical support facilities

Day Surgery doubled the existing hospital facilities, four day case theatres, 4x4 adult bays, 2 adult single rooms and 1x6 paediatric bay

Short Stay Ward 40 bed elective short stay ward, encompassing 50% single bed facilities

Construction was carried out by Kier Construction, with Kier Services providing 24/7 Engineer Support, Hard FM, a Helpdesk Facility, a Lifecycle Management Programme and Utilities services.

The facility is the biggest addition to Ipswich Hospital for 30 years, transforming healthcare for the people of Suffolk and becoming the main focus of the hospital.

The new Centre is great news for people living in Ipswich. It will offer modern critical care and day case surgery, with more beds, bays and

treatment rooms, as well as a special recovery area for children.

Jane Kennedy, Health Minister


Libraries Bournemouth Library

This ground breaking £19m scheme provided Bournemouth with a new central library, an IT system which covers both the new library and the Borough’s eleven branch libraries and a significant capital contribution towards new books and resource materials.

The new library was constructed above a retail development which has contributed to the regeneration of the Triangle area of Bournemouth. The contract runs for 30 years from the completion of construction in spring 2002. The IT service went live in March 2001.

The scheme was a local authority ‘Pathfinder’ project and was one of the first library PFIs to reach financial close. It is also the only project of its size to combine the provision of accommodation with a significant IT service.

KPI holds a 50% equity share in the project company, Information Resources (Bournemouth) Ltd.

The subcontractors to the project company are both subsidiaries of the Kier Group, Kier Construction (Southern) provided design

and construction services and Kier Services provides the operational services.

Bournemouth Library was awarded the Prime Minister’s Better Public Building Award in March 2003 and has also received a Civic Trust commendation.


6 Cavendish Place London W1G 9NB

t: 0207 462 2750 e: [email protected]

kier project investment project investment | 3. ... phil woods, associate director pip prongué,...

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