King Sturge Financial Services has been the lead advisor in complex joint venture
02 December 2008
Croydon Council and John Laing formally sign £450 million regeneration deal
King Sturge Financial Services Limited has been the lead advisor to Croydon Council in setting up a pioneering Local Asset Backed Vehicle (LABV) between John Laing plc and Croydon Council. The £450 million joint venture will regenerate significant sites across Croydon town centre and deliver new flagship council headquarters.
Chris Pratt, Managing Director of King Sturge Financial Services Ltd said: "This is a complex deal achieved in difficult market conditions and the first of its kind completed by a local authority, it will hopefully provide the blueprint for the many council's that are facing similar challenges.”
The first deal of its kind with a local authority, this is a new model of public private partnership, utilising an asset backed Urban Regeneration Vehicle (URV) into which Croydon Council will invest land and John Laing equity. Through this limited liability partnership, the council will receive a 50/50 share in profits and will maintain ongoing control of its extensive regeneration agenda by retaining an interest as a partner-landowner as well as through utilising its planning powers.
The 25 year URV partnership will provide the phased regeneration of four important town centre sites with the creation of two 40 storey towers with approximately 650 residential units; a combination of both private and affordable accommodation. In total the four sites will create approximately 1,250 new residential units and 20,000 ft² of retail space, all to be delivered between 2012 and 2017.
The project also includes the delivery of a brand new 240,000 ft² headquarters office building at Fell Road for the council. King Sturge Building Consultancy team are advising the LABV up and until the new headquarters are built. It is anticipated that the council’s land value and share of development profit will be sufficient to pay for the building and its running costs for many years.
With the council’s long-term regeneration strategy, they also have the option to add additional sites into the partnership as and when further development is required over the next 25 years.
Kate Tigwell, Associate Director of King Sturge Financial Services Ltd said “When the procurement phase to find a development partner commenced we received particularly high levels of interest with many of the large UK developers and funders applying. The final tender stage was between John Laing plc and Land Securities Trillium. We are very pleased that we have reached a successful conclusion for our client and the deal completed on 28th November 2008. We are already working with a number of other Councils on similar type development vehicles and look forward to taking the next one to market.”
