Service 1 – Strategic Infrastructure and Non-Residential Land Valuation Framework Workstream 1 – Inception, Information Review and Project Management • Attend one inception meeting of up to two hours within one week of appointment. • Review the project information made available by Homes England, including masterplans, planning and development assumptions, infrastructure and transport strategies, programme information, consortium arrangements, land ownership information, relevant legal agreements, cost estimates, viability and financial modelling and Network Rail correspondence. • Prepare an Information Requirements Schedule identifying information required, its purpose, owner, priority and any implications if unavailable. • Confirm the proposed methodology, programme, deliverables, review process and reporting arrangements in an inception note. • Maintain an issues, assumptions and decisions log throughout the commission. • Attend up to two progress meetings of up to one hour each in addition to the specific meetings identified below. Workstream 2 – Valuation Principles and Methodology • Develop a valuation methodology for strategic infrastructure and non-residential land uses on large consortium developments. • Consider appropriate approaches to existing use value, market value, development value, residual value, land value uplift, opportunity cost and value sharing. • Explain when each approach should be used, the evidence required, key assumptions, limitations and circumstances in which an alternative approach is necessary. • Establish principles for value attribution, proportionality, infrastructure dependency, public and private investment, commercial reasonableness and market practice. • Address the interaction between residential development value and land required for non-residential uses. • Provide a clear decision tree or process map showing how Homes England should select and apply the appropriate methodology. Workstream 3 – Asset-Type Application Guidance The framework shall include specific guidance for the following asset types, identifying the recommended valuation basis, evidence requirements, key adjustments and principal risks for each: • education land; • healthcare land and facilities; • public open space and community parks; • strategic green infrastructure; • community and cultural facilities; • emergency services land; • transport and rail infrastructure; • utilities and service infrastructure; and • other public-sector or enabling land uses. The Consultant shall identify which principles are common across all asset types and where materially different approaches are required. Workstream 4 – Costs, Obligations and Adjustments • Establish how strategic infrastructure costs, abnormal costs, mitigation, legal obligations, land assembly costs, programme impacts and delivery risk should be treated in valuation assessments. • Distinguish between costs that affect gross value, costs that may properly offset value uplift and costs that should be treated elsewhere in a development appraisal. • Address the treatment of timing, indexation, risk, contingency, phasing and double counting. • Provide worked examples or illustrative calculations sufficient to demonstrate application of the methodology. Workstream 5 – Consortium and Multi-Landowner Considerations • Advise on appropriate common assumptions where commercially sensitive information cannot be shared between developers. • Address differing developer appraisals, landowner positions, collaboration arrangements and governance structures. • Identify implications arising from Competition and Markets Authority considerations and data confidentiality. • Recommend practical governance, evidence and assurance arrangements to support consistent application of the methodology across a consortium. Service 2 – Network Rail Shared Value Assessment Workstream 6 – Network Rail Case Study and Valuation • Apply the recommended framework to the current Network Rail Shared Value discussions at Wychavon Town. • Assess the relevant existing land value and development value positions using available evidence. • Identify the extent to which value is attributable to Network Rail land, assets, rights or interventions. • Assess potential gross and net Shared Value and provide a reasoned value or range of values. • Identify the asset interventions and legal or operational dependencies that materially affect the assessment. • Provide sensitivity testing against the assumptions most likely to affect the outcome. • Clearly distinguish facts, assumptions, professional judgement and areas where further evidence is required. • Provide an independent opinion on the likely commercial position and recommendations for Homes England’s negotiations with Network Rail. Workstream 7 – Network Rail Costs and Offsets The assessment shall identify and evaluate costs and deductions that may be relevant to any net Shared Value position, including where applicable: • strategic infrastructure costs; • rail enhancement and Network Rail asset works; • asset protection costs; • bridges, crossings and access arrangements; • operational railway land, permanent acquisition and temporary possession; • drainage, easements and statutory undertaker requirements; • abnormal development costs; • highways, utilities and environmental mitigation; • legal obligations, land assembly and programme impacts; and • any other relevant costs or benefits. The Consultant shall explain the basis on which each item is included or excluded, how it affects the assessment and how double counting is avoided. Workstream 8 – Existing Models and Assurance • Review existing financial modelling and viability work only to the extent necessary to ensure consistency of assumptions and avoid duplication. • Identify and explain material inconsistencies between the valuation assessment and other project models. • Set out an audit trail of source information, assumptions, adjustments and calculations. • Provide a proportionate quality assurance statement confirming the internal review undertaken by a suitably experienced senior valuer.
