Notting Hill Housing Trust Kate Davies Chief Executive Paul Phillips Finance Director Andrew Sugden Assistant Finance Director December 2012 www.nottinghillhousing.org.uk
Disclaimer For the purposes of the following disclaimer, references to this presentation shall mean these presentation slides and shall be deemed to include references to any related speeches made by or to be made by the management of Notting Hill Housing Trust (NHHT), any questions and answers in relation thereto and any other related verbal or written communications. This presentation may only be communicated or caused to be communicated in the United Kingdom to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or high net worth entities who fall within Article 49(2)(a) to (d) of the Order (all such persons being referred to as “relevant persons”). Any investment or investment activity to which this presentation relates is available only to relevant persons and will be engaged only with relevant persons. This presentation is being directed at you solely in your capacity as a relevant person (as defined above) for your information and may not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose, without the prior written consent of NHHT. The information in this presentation is confidential and subject to change without notice, its accuracy is not guaranteed, and it may be incomplete and is condensed. This presentation will be superseded by the final version of the prospectus or offering document relating to the proposed transaction and where there is a discrepancy between the information in this presentation and in the final offering circular, that contained in the final offering circular takes precedence. These presentation slides may contain certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, is not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although NHHT believes that the expectations reflected in such statements are reasonable, no assurance, representation or warranty can be given that such expectations will prove to be correct. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Issuer. It is an advertisement and does not comprise a prospectus for the purposes of EU Directive 2003/71/EC and/or Part VI of the Financial Services and Markets Act 2000 of the United Kingdom or otherwise. The definitive terms of the securities described herein will be described in the final version of the prospectus. Investors should not subscribe for any securities referred to herein except on the basis of information contained in the final form of the offering circular. When available, the final offering circular will be made available to the public in accordance with EU Directive 2003/71/EC and/or Part VI of the Financial Services and Markets Act 2000. Page 2
Table of Contents 1. Introduction 2. Overview of Notting Hill Housing Group 3. Development Programme 4. Operational Review 5. Financial Review 6. Treasury Policies 7. Expected Issue and Security Summary Page 3
Introduction Bridges Wharf, Battersea Harmony, West Middlesex Hospital Myddelton Street, Islington
Key Messages • Notting Hill Housing Group (“NHHG”) operates predominantly in London, with its roots in the Royal Borough of Kensington & Chelsea and the London Borough of Hammersmith & Fulham • A member of G15 group of London’s largest housing associations • As of 31 st March, 2012 – 27,135 units under management with a vacant possession value of £6.3 billion • Strong and long-standing management team • Largest HCA grant and development programme in London, supported by sound financials and a measured approach to balance sheet management • Track record of successful development sales • Consistently strong credit rating of Aa3 by Moody’s • Maintained excellent regulator ratings for governance, management and financial strength Page 5
Overview of Notting Hill Housing Group Colville Square, W11 Park Village, Camden Earls Court Mansions, SW5
Overview and Recent Developments Overview Recent Developments • • Leading London Housing Association, Completed sale of stock outside of formed in 1963 London which was acquired as part of • Presentation Housing Association Core business remains unchanged with primary focus on general needs • Largest HCA allocation in London and housing in London 3rd largest in the country (£58m) • Strong governance with a skilled and • Committed funding in place to fund experienced board development until 2015 • Operates within a highly regulated • Tapped 5.25% 2042 Bond in 2011 for sector £120m, increasing size to £300m • Flexibility to adapt to political change • Continued renewal of Board and respond to Welfare Reform membership High quality assets in high demand areas Page 7
NHHG Group Structure Registered with the HCA NHHG Properties Units with Charitable Rules Social Rented 15,872 Shared Ownership Housing 4,406 Notting Hill Housing Trust Temporary Housing 2,298 (“NHHT”) Supported Housing 1,348 Student Accommodation 839 Market Rent 698 The Issuer and major asset Intermediate Rent 54 owner Leasehold in Management 1,620 Notting Hill Notting Hill Presentation Notting Hill Touareg Trust Home Ownership Market Rent Market Rent Commercial Properties Student Shared Investment vehicle Market rent Market rent accommodation ownership (for build for sale operation) Page 8
Governance Structure Board Members Executive Management Team Paul Hodgkinson (Chairman) Kate Davies (Chief Executive) Alex Phillips Paul Phillips (Finance) Sophie Warner John Hughes (Development) Debra Yudolph Andy Belton (Operations) Mohan Yogendran Andrew Muir (Corporate Services) Sue Hunt Kath King (Asset Management) Linde Carr Bukky Bird Alastair Moss A broad range of commercial and operational skills Page 9
NHHG Housing Stock by Location Group Stock Map 27,135 properties under management As of 31 March 2012 Page 10
Core Asset Base Top five locations of NHHG assets (61% of all stock) Borough Units Share of Total Hammersmith & Fulham 4,688 17% Kensington & Chelsea 4,281 16% Hounslow 2,688 10% Lambeth 2,593 10% Ealing 2,283 8% Average gross cost per social rented unit - £92,500 Fabrik, Brixton, SE5 Bramham Gardens, Kensington & Chelsea, SW5 Page 11
NHHG Housing Stock by Type 30,000 30,000 Leasehold in management Leasehold in Management 25,000 25,000 Supported Housing Supported Housing Student Accommodation Student Accommodation Intermediate Rent 20,000 Intermediate Rent 20,000 Market Rent Market Rent Leased Housing Leased Housing 15,000 15,000 Temporary Housing Temporary Housing Shared Ownership Shared Ownership 10,000 10,000 Social Rented Social Rented 5,000 5,000 0 0 2006 2007 2008 2009 2010 2009 2010 2011 2008 2012 2010 - Acquisition of Presentation Page 12
Development Programme Great Eastern Quays, E6
Affordable Housing Programme • NHHG has received an allocation for grant of £58m. The basis of the programme is: • 1,244 rented, 1,066 shared ownership • Circa 93% of sites for the affordable housing programme are in our control/ownership and 66% have planning permission in place • Affordable Rents capped at a maximum of £244 per week • Average rent is 65% of market (at 40% today) • 50% of relets converted to higher Affordable Rents, to increase income by £3.4m per annum • No sales of existing stock to support bid • Going forward, overall target for NHHG development programme remains 1,200 homes p.a. but may increase to 1,500 (including commercial development) Page 14
Map of NHHG Development Programme • HCA grant will support development at these sites Page 15
Recent Typical NHHG Development • Lower Richmond Road, Richmond • Completed March 2012 • 52 residential properties, 20 social rent and 32 shared ownership • Two commercial units • Cost: £12.4m Grant: £6.8m • Shared Ownership Statistics • Average sales period: 3 weeks • Average first tranche: 43% • First tranche profit: £1m Page 16
Operational Review Bridges Wharf, Battersea, SW11
Key Performance Indicators Measure 2011 2012 Comments High levels of completions to meet HCA Homes completed 895 1,580 2011 cut off for "old" grant rate on a lot of schemes Sales time to 31 March a peak - falling steadily ever 7.8 14 completion (weeks) since - now 9 weeks Rent collection rate 98.9% 100% Rent collection rates improving Rent losses due to 1.98% 1.60% Voids improving voids Customer satisfaction up from 58% to Customer 67% 74% 74% over two years, but still a way to go satisfaction - repairs contracts difficult Page 18
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