Land Securities pre-sells Park Place
Published: 17 June, 2010
Land Securities has pre-sold its Park Place mixed-use development on London's Oxford Street to Barwa Real Estate for £250m
The development, occupying an entire street block opposite Marks & Spencer's Marble Arch store and next door to Primark's UK flagship, will provide 87,000 sq ft of retail beneath 163,000 sq ft of offices and 58,00 sq ft of residential space. Development had been postponed after the property crash but was restarted in May 2010 and the project is now scheduled for completion in November 2012.
Now Land Securities has agreed to forward sell the project to Qatar-based Barwa Real Estate. Barwa will pay £250m for the site, all of the construction costs and a profit share on completion. Land Securities will act as development manager responsible for delivery of the project with construction works paid for by Barwa.
Under the terms of the deal a profit share will be calcualted within 12 months of practical completion. Based on current expectations of office and retail rental values this profit share is expected to generate another £33m for Land Securities but it is capped at £50m.
Robert Noel, managing director of Land Securities' London portfolio, said: "Park House is the largest speculative development in Mayfair for a generation and this sale enables us to realise the majority of our profit ahead of schedule, with significantly reduced risk and with no capital employed. We will recycle the capital to invest into our growing speculative development pipeline targeting the further return opportunities offered to our shareholders through early delivery into a forecast supply constrained market."
CB Richard Ellis advised Barwa.
