We have condensed key facts and other important information about Annington into short, easy-to-read chapters.
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£6.1 billion - Carrying value of Group investment properties at year end, up 13% from 2014
£728 million - Net uplifts in value of the Group's investment properties
£162 million - Annual rent on properties leased to MoD
39,262 - Properties on long-term lease to MoD
58% - Discount to open market rent given to MoD on long-term leases
837 - Properties on short-term bulk leases to the MoD
310 - Properties sold
£74.1 million - Sales income from sold properties
Annington was created in November 1996 with the purchase from the Ministry of Defence (MoD) of a 999 year lease in 55,060 homes (the “Married Quarters Estate” or MQE), the freehold of 2,374 homes (the “Surplus Estate”) and a number of related assets. The price paid was £1.67 billion plus a share of profits which came to £161 million by November 2011 when it ended.
The MQE was leased back to the MoD for 200 years at a discount of 58% to open market rent. This discount is reviewed site by site, starting in 2021.
39,014 properties from the MQE are still let to the MoD at an average annual rent of £4,393.
The MoD can terminate a lease (on an individual unit or blocks of units) by giving six months’ notice to Annington, which then has an automatic right to acquire the freehold on these ‘released’ properties.
Before sale, most properties undergo significant refurbishment to improve the general environment and street scene and to remove any obstacle that might make it difficult to get a mortgage. A small number are used in redevelopment schemes where Annington can realise significant added value by gaining planning permission, after which it might sell the land, redevelop the site or enter into partnership with a third party.
Including redevelopments and related assets, Annington has sold 18,324 released properties (to 31 March 2016). 46% of sales to private indivduals have been to first time buyers.
The current released stock is fewer than 400 units.
Annington and the Annington Trust have supported a range of diverse charitable projects and activities, both in cash and in kind. A conservative estimate of such ‘goodwill support’ since 1998 is more than £1,000K.
Annington is owned by an investment fund managed by Terra Firma Capital Partners Ltd.
The MoD provides a Minimum Guaranteed Rental payment which declines over the period to 2021.
The MoD, through the Defence Infrastructure Organisation (DIO), has sole responsibility for the condition of the married quarters and for their management and maintenance. The management of the DIO is currently outsourced to Capita, a strategic business partner.
The number, location and timing of releases is at the sole discretion of the MoD.
Released properties are required to be handed back in ‘good and tenantable’ repair, otherwise Annington is able to claim dilapidations from the MoD.
Apart from condition, other principal issues include title and the condition and routing of utility services.
The MoD reported in December 2015 that there were more than 10,400 void units in their Estate (8,400 in England and Wales). Units are left empty for a number of reasons: to provide a management margin, substandard properties, a lack of funds for upgrade or redevelopment, vacancies awaiting redeployments of troops, temporary accommodation while properties are upgraded, and genuine voids arising from a lack of demand. The MoD’s housing requirement is dependent on long-term defence strategy.
The Strategic Defence and Security Review (SDSR) 2010 set the tone for a radical reorganisation of the Armed Forces - the number of service personnel has dropped from 180,000 servicemen to 141,000, there has been a withdrawal of 15,000 troops from Germany (with another 5,000 to come by 2019) and a widespread rebasing of units within the UK is under way. This has far-reaching implications on the MoD’s requirements for housing; so far, the effect on Annington has been minimal.
The properties are/were used by the MoD to accommodate service families.
The properties are in England and Wales only – those in Scotland and Northern Ireland were not included in the sale. The properties range from two bedroom flats to eight bedroom houses, from Cumbria to Cornwall and South Wales to Suffolk.
80% of the stock comprises ‘Other Ranks’ accommodation, predominantly 2 and 3 bed terraced or semi-detached properties, the balance ‘Officers’.
Density averages 10 units/acre or 25/hectare which, under current Government guidelines, can provide infill and redevelopment opportunities in some circumstances.
There are broad differences in the quality and condition of the stock, with 11% of all properties of non-traditional construction.
Annington believes in providing good quality, value for money homes.
Annington always tries to offer its homes at competitive prices with the most appropriate financial incentives and, by doing this, aims to make house purchase accessible and affordable to more people.
Annington aims to create environments in which people want to live. This may involve modifying the street scene through landscaping or altering the external appearance of the homes, the aim being to add interest to streetscapes that previously had lacked either individuality or variety.
Annington will normally ensure that the homes it sells meet its ‘Safe and Sound’ specification before a sale is completed, meaning electric, plumbing and heating systems are thoroughly checked and any defects or issues that might affect a mortgage are dealt with.
Sales values vary widely and are dependent on a range of factors, from location and house type to age and condition. The average net sales price for all private sales in the 12 months to end March 2016 is £251,998 per unit.
Annington Rentals Holdings Ltd (ARHL) owns 1,335 units, comprising flats and houses let on individual and bulk leases. Some, but not all, of these are held to provide evidence of rents in the rent review process.
ARHL manages, on behalf of APL (Annington Properties Ltd) and ADL (Annington Developments Ltd), a further 86 units. These units are rented pending the resolution of legal and utilities issues and the outcome of planning applications. Not all are available for rent.
ARHL assists DIO with the management of 109 long-term voids that are let to the general public.
ARHL currently outsources the day to day management of its rental portfolio to Touchstone Corporate Property Services Ltd based in Bath.
Annington Developments Ltd (ADL) will appraise opportunities for infill or wholesale redevelopment on all sites. ADL, as a priority, aims to maximise added value through planning consent where appropriate. Thereafter, ADL will either sell the land, carry out infrastructure works, build out or partner with developers and house builders if there is demonstrable added value and benefit in doing so.
Annington has joint ventures with Countryside Properties plc on sites at Colchester (261 homes) and Mill Hill (395 homes) and manages a large partnership development at Mill Hill in London (2,100 homes).
The Annington Trust was established in 1996 "for the benefit of service families living on the patch", with the objective of sponsoring community activities and projects. Since then, the Trustees have disbursed over £542,000 to support over 430 projects. The grants have varied from a few hundred pounds for pre-school activities or sports clubs, to major awards of several thousand pounds.
The Annington Trust has joined forces with The Outward Bound® Trust for The Annington Challenge which is an exciting initiative for young people from Service families living in Services’ communities. Since 2011, it has sponsored 165 young people aged between 13 and 19 on an 8-day Outward Bound Serious Adventure course.
Quite separately, Annington complements The Trust’s good efforts in a range of diverse projects and activities that do not fall directly within the trust’s charitable objectives. Either in cash or in kind, the company has made possible events for services’ clubs and charities and has responded generously to many appeals by such bodies.
Annington encourages staff participation in charitable activity by match-funding the amount they raise in their own fund-raising efforts. From a solo effort in the Blind Veterans UK Half Marathon to a 5k Fun Run dressed as Santa to raise money for MacMillan Cancer Support, Make a Wish Foundation and Save the Children. Furthermore, Christmas Jumper Day was celebrated, raising additional funding for the same charities.
Annington likes to support local communities wherever it is active. For example, the Queenswell Infant and Nursery School received £11,745 for an entirely new natural play area and £500 worth of Lego to support its “Lego Therapy”. We also supported First Light Trust, a fledgling charity that provides support to homeless veterans. This donation will help the charity to complete its Policy and Procedures documentation.
Annington colleagues also give their support by way of use of their skills and time. Recently, a group of 11 went to the Bag Books workshop to help build multi-sensory books. Others went to The Connection to help by conducting surveys in order to better understand how The Connections’ services can help the clients that walk through their doors. In March, three Annington employees formed part of the Dinner in the Dark Committee, a fundraiser for Blind Veterans UK that raised more than £32,000 its first year.
We have committed support for a minimum of three years to a selection of charities that we believe in:
Blind Veterans – a charity that helps former service men and women who have become blind. Annington has committed £25k p.a. for the next 3 years to establish centres for rehabilitation and life skills for independent living.
Bag Books – creates and makes multi-sensory books for children and adults with profound & multiple learning disabilities. A commitment of £25k p.a. for the next 3 years will support administrative costs and visits to schools with armed forces families in their catchment area.
The Connection at St Martin-in-the-Fields – Annington has committed £25k p.a. for the next 3 years. The Connection helps people cope with the physical and psychological crisis of being homeless.
High Ground – since 2013, Annington has donated £20k p.a. to help establish this charity which provides therapy to injured service personnel and also helps service men and women to access new career and vocational opportunities in the rural sector.
The Ripple Pond – Annington has committed £25k p.a. for the next 3 years to establish this charity which is a network of local, peer-led, self-help support groups for the family members of wounded, injured and sick servicemen and women, reservists and veterans.
Pending release (terminated by MoD): 35
From MQE and Surplus Estate: 18,056
New Build and Related Assets: 268
Units Sold: 18,324