A Property Partnership model (sometimes known as a Local Asset Backed Vehicle or LABV)is a partnership between the Public and Private sectors, with the creation of a limited liability corporate entity.
The model allows the Authority to contribute land and assets to the partnership, while the Private Sector commits equity and expertise. After the Authority has received a base value both parties receive a 50% share of any profits generated through the partnership.
The model allows Councils to unlock value from land through property development to help deliver regeneration. Rather than selling property without any future control over how it is developed, the model structure maximises value and ensures Authorities maintain control of assets throughout the duration of the partnership, both as a shareholder and as the planning authority.
Working in partnership with the Private Sector allows for accelerated delivery of infrastructure assets while transferring the risk of debt onto the Private Sector.
As well as the injection of equity, the Public Sector also benefits from Private Sector expertise including development management, financial modelling skills, targeted stakeholder engagement, supply chain management and buying power.The model takes a long-term approach to developing both the operational and investment estate through aligning economic development objectives, regeneration and planning aspirations. The model supplements in-house resources and allows projects to be actively promoted, including the funding of opportunity purchases that meet the objectives of the partnership.
Not only do Councils receive the value of land but also a share of development profit as they use land value as equity in development projects.
