The Dolphin Square Foundation (DSF) is a charity established in 2005 with the proceeds from the sale of the long leaseholds of the eponymous and famous riverside Pimlico mansion block. Its brief is basically to provide “mini-Dolphin Squares” for Westminster residents “in housing need”.

Lancastrian Brian Ham has been its Chief Executive since 2009 and, armed with the £125m Dolphin Square legacy, the DSF now has no less than nine live projects under way.  His goal is to get 1000 affordable homes in the pipeline in the first five years of his stewardship.

The current nine projects will deliver more than 400 units, so he’s looking pretty much on target – and he needs to be because he has a board of big hitters including some of the great and good of property: Former LandSecs’ chairman Ian Henderson, Trevor Morross, Chief Executive of Dorrington, Colin Redman,
formerly of Grosvenor – in fact the board is stuffed with potential customers for what DSF produces – ready-made residential property investments. But more of that later…

DSF’s first seven refurbished properties have just been delivered in Queen’s Park, Westminster, and two more detailed planning applications are due for decision before Christmas.  The foundation is also working on three joint ventures, two in Westminster and one in Westbourne Park, also in Westminster, in partnership with a church.

In Westminster, DSF and Barratt have joined forces to refurbish and develop the former police hostel, Trenchard House on Broadwick Street, in Soho.  The Foundation is Barratt’s social housing partner in a deal with the Homes and Communities Agency. 65 out of 78 homes will be intermediate keyworker housing, with 13 private apartments.

The foundation’s ninth scheme is a proposal to buy 78 units from Argent’s first phase at King’s Cross, where a block of intermediate housing is being built above a school.  “Three more exciting proposals” are in the pipeline, says Brian Ham.

The foundation’s constitution allows it to develop rather vaguely “in the locality” and this is not defined in borough boundary terms, but it can only develop outside Westminster with the council’s consent, which has a seat on the board. “We have an understanding the lion’s share will be in Westminster,” says Ham.

“We work without grant aid, so the challenge is to find sites we can pay a sensible price for – usually in stiff competition with others. It is a constant balancing act to be able to build houses that are affordable.  In many respects we are more like a private rented developer than a housing association – but charging intermediate rents.”

“We aim to achieve a net running yield of 4% and we don’t factor in capital growth, that’s just rental. Our rents are controlled through the planning regime and our preference is to do schemes that are solely intermediate without social housing.”  “I’m a strong believer in mixed neighbourhoods, but the pragmatist in me recognises the difficulty of doing mixed buildings from a design and management point of view.”

He lists the problems: different rents, different service standards, complex charges and separate circulation cores which cause “horrendous inefficiencies”. “So let’s have mixed neighbourhoods,” he says, “but on a building by building basis. Pepper-potting just doesn’t make sense.” Something his private sector rivals wholeheartedly agree with.

At Moreton Street in Pimlico, planning conditions are just being finalised for a 39-apartment scheme, designed by Paul Davis and Partners.

These will be offered at 65% of open market rents, whereas under planning rules, they could be offered at 80% of market. But that would make them unaffordable to households earning less than £50,000 a year. “We want to make our stock available to people earning a bit less than that,” Ham explains.

Tenants will be selected by the foundation from a list of qualifying keyworkers registered with Westminster and DSF “markets” the scheme’s availability to those on the list.  About 3000 keyworkers are on that list at the moment but Ham admits it is “likely to grow”.

The development programme has been about giving Dolphin Square Foundation a track record and credibility so it can fulfil more developers’ affordable housing requirements.  “We’ll take flats off developers without grant aid,” says Ham. And now that housing associations are also shorn of grant aid, the foundation is looking like an increasingly attractive partner for developers.

About £85m of the foundation’s original £125m legacy is now committed and the aim is to recycle this by securing debt finance on schemes as they complete and let. Rents are tied to wage inflation or the price index so DSF has an inflation-proofed income stream.

The short term priority is to achieve the full £125m worth of schemes that can then turn into a medium-term strategy to recycle the capital. “It is pretty much like Peabody Trust 125 years ago, but the board wants independence from state funding,” says Ham.

There is growing interest from private investors in Dolphin’s model. “The model should work well for investors who want to commit equity to completed developments that are income producing. Some money doesn’t want the development risk, but we’ll have a nice income stream from our developments.”

There are also other advantages in providing much-needed affordable, intermediate housing. Tenants don’t move around so much. The average “dwell time” reveals Ham is expected to be about four to five years – three times that of the private Assured Shorthold Tenancy market place, which means many less voids.

There are cost advantages too stemming from the mono-tenure character – all of which mean, Ham maintains, that Dolphin is pretty competitive when it comes to bidding for sites. “It all works for us at around £500 a sq ft [capital value]” he says.

Given the track record Dolphin has now established, the heavyweight board and the substantial legacy which will soon be available for recycling into new schemes, you can’t help thinking that the foundation could have an illustrious future as a new model for the private rented sector. It has shown the initiative which the much trumpeted PRSI has so far failed to deliver.

The homes are managed on behalf of the DSF by Yarrow Housing who are a leading specialised provider of learning disability accommodation.  This development provides the first Dolphin Square Foundation tenants and they will be joined by many more over the coming years.

DSF has successfully delivered the first housing project in the City of Westminster with the opening of seven refurbished properties in Queen’s Park. Jonathan Glanz, the Cabinet member for Housing and Property at WCC joined other key local stakeholders for the opening event to celebrate the milestone.

Working with specialist social housing contractor United House, the properties have undergone major refurbishment works to provide homes for residents with learning disabilities.

The homes were bought by DSF in 2010 after sitting empty for a number of years.  The homes will be managed by Yarrow Housing who provide support and care for people with learning disabilities.  Each home has been renovated to a high standard and adapted to meet the needs of its residents.

The newly refurbished homes include environmental measures that will significantly reduce their carbon footprint and help save 60 to 70 per cent in CO2 emissions and also help save money on energy bills.

Brian Ham, Chief Executive of Dolphin Square Foundation said:

“We are delighted to have successfully delivered our first affordable housing development in the capital.  These homes will now provide the residents with a high quality and bespoke living environment, setting a new standard in quality, design and environmental measures for renovated buildings. We have worked closely with both United House and Yarrow Housing to ensure that the quality of life is significantly improved for our residents with learning disabilities.”

Cllr Jonathan Glanz, Westminster City Council’s cabinet member for housing and corporate property, said:

“What has been done here is truly outstanding and my congratulations go to all involved with the project.  In a little over a year since taking on these homes, Dolphin Square Foundation has transformed them from dilapidated properties that were not fit for purpose into high quality homes. This is just the first of DSF’s developments and I look forward to seeing many more across central London.”

The ball is now rolling on DSF’s delivery of homes in Westminster and construction of the next development on Moreton Street will be underway shortly. The scheme will provide 38 quality homes in Pimlico and has a projected completion date of summer 2012.

This means construction on the 39-unit development, designed by Davis and Partners architects, can now begin in Spring 2011 in order to be completed in Summer 2012.

The project, which will provide high quality affordable rental homes for people living and working in Westminster, will be built to the highest environmental standards possible and sets a precedent for future DSF developments.

Brian Ham, Chief Executive of DSF, said: “We are very proud of the high design standards we have achieved in Moreton Street and will continue to apply the same benchmark to other projects. Our aim is to set a new quality standard in affordable housing and Moreton Street is a major step in achieving this ambition.”

Brian Ham, Chief Executive of DSF, said: “Our aim is to ensure that the homes we provide for our customers are as comfortable and practical as possible, and getting the interior design right is a major part of this. Jestico+Wiles are a leader in the field of sustainable design and will work with us to create a new model for affordable housing, based on the highest standards of quality, comfort and style.”