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The Minerva Model

• The model is of a unique and innovative nature.• Minerva has developed a model for the delivery of sustainable urban

communities centred upon meaningfully affordable rented housing and SME workspace.

• There are three key characteristics to the model, as described below.

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Key elements: 1

• Most importantly, the model is ‘needs’ led, i.e.:• For homes, people on ‘normal’ salaries can afford to live there

comfortably for their entire lives, should they wish to do so. But note that this is not socially rented regulated housing provision.

• For commercial space, SMEs can establish and develop their businesses in premises which are also ‘meaningfully’ affordable over time.

• In both cases, there is no public-sector subsidy.

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Key elements: 2

• Buildings are constructed to the ‘max.’:• Highest quality sustainable construction with materials of proven

longevity, low carbon, smart energy etc. • Consequently, much lower ongoing maintenance costs.• This approach is significantly more expensive than standard housing

construction methods and unaffordable for today’s commercial, profit driven developers.

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Key elements: 3

• The model is funded through an innovative blend of capital:• Pre-development: primarily impact finance (e.g. global foundations

and other social impact investors).• Development: very long term institutional funding with initially low

rates of return but which increase over the investment period.

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Why it is unique

• No public-sector land sale required to deliver homes – delivery vehicle requires only a 99 year and (possibly) option to renew at year 100.

• Landowner receives over time (30 years plus) a sum considerably greater than the freehold value of the land BUT for a long leasehold interest.

• Public-sector landowner receives other benefits which ‘count’ towards the s.123 Local Government Act 1972 ‘best value’ receipt required for land disposals.

• Delivery vehicle guarantees meaningfully affordable rented (typically generously proportioned) housing stock over long period of time which previous models haven’t achieved.

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Why it is unique (cont.)

• Rental levels could be set at around Living Rent levels within the financial model – although this delivers less total financial return to the landowner.

• High social and economic impact/ community building can be delivered with no public-sector subsidy required.

• Not for profit structure of delivery vehicle and nature of investor funding means that there is an ability to focus on, and fund the construction of, place making/social infrastructure/ community facilities- which mass housebuilders/ residential property developers have no interest in attaining.

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Why it is unique (cont.)• Sustainable long life, high quality, environmentally friendly built

environment consistent with wellbeing and sustainable community life –building and public realm/ facilities design led by those aims i.e. beauty, well-being, sustainability, longevity NOT profit led.

• No difficult negotiations with the LPA/ loggerheads over the nature and extent of s.106 contribution. Entire development will qualify as a valuable direct s.106 contribution on the basis that it is affordable housing within local authority planning guidance.

• Lack of planning ‘arguments’ ensures compressed period to achieve full planning permission and hence shorter period to delivery of homes/ workspace.

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Why it is unique (cont.)

• No need for land banking so development phase proceeds as soon as full planning permission is granted – in effect accelerated construction not driven by land sales/ market demand or ensured by public sector backed financial stop loss arrangements.

• Created by experienced professionals with a unique combination of expertise – so the individual elements of the model have been tried and tested in very different contexts. Minerva has combined those in a careful and informed manner deliberately to avoid the barriers to, or pitfalls seen, in previous attempts to deliver ‘affordable housing’.

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What the Model is NOT

• It is not too good to be true – it’s particular features mean that what it can deliver is unable to be matched by for profit driven commercial developers.

• It does not involve any hidden catches in the form of public sector subsidy, guarantees, underwriting or indemnities of any kind.

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Particular Benefits of the Model

• Financial: the net present value of the stable income stream offered for only a long leasehold interest is significantly greater than the open market value of the FREEHOLD land interest.

• Land interest: The landowner does not have to sell its freehold interest. It only grants a 99 year lease.

• Capital asset: When the lease expires, the landowner will have an unencumbered highly valuable, income producing real estate asset.

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Particular Benefits of the Model (cont.)

• Built environment: the developments will be constructed of the highest quality materials taking advantage of state of the art technology and set into beautiful public realm. It will deliver built environment which is entirely aligned with the vision for long term happy, healthy, sustainable communities.

• Planning gain: the entire development will deliver s.106 compliant contribution to the LPA.

• Unlocking unviable sites: A Minerva development within a larger site can, given its 100% s.106 compliance, unlock the value of otherwise unviable sites for landowners.

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Contact details

E-mail: project.minerva.jt@gmail.com Mob: 07718 313 412

Web: www.minervasmartcities.com

E-mail: project.minerva.nb@gmail.com

Mob: 07718 313 612 Web: www.minervasmartcities.com

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Disclaimer

This document, issued by Minerva Smart Cities Ltd (the “Company”), is not intended as the basis for making a decision to enter into any investment described in this document. The

information contained in this document does not constitute an offer or solicitation to sell any security. This document is provided to you for information only and is not investment advice nor

does it contain sufficient information for you to make an investment decision.

The facts or opinions contained in this document have not been verified by the Company and no warranty is given as to their accuracy, completeness, achievability or reasonableness, as they

are illustrative only.

All statements in this document (“Projections”) relating to the future represent the Company’s own assessment and interpretation of information available to it as at the date of this document.

No representation is made or any assurance, undertaking or indemnity given that such Projections are correct or that they can be achieved.

In considering any Projections contained herein, you should bear in mind that such Projections (and, in particular, any projected returns) are not indicative of future results, and there can be

no assurance that an investment will achieve comparable results or that projected returns will be met. The value of investments may fall as well as rise and past performance should not be

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