JV with Scottish Widows
Great Portland Estates PLC
26 July 2006
Great Portland forms West End JV with Scottish Widows
26 July 2006
Great Portland Estates plc ('GPE') announces it has formed The Great Wigmore
Partnership ('The Partnership'), a 50/50 joint venture with Scottish Widows Plc
('SW'), to own and develop two central London properties.
GPE will contribute its office development scheme at 179-202 Great Portland
Street, London W1 ('180 Great Portland Street') and £5.0 million in cash. In
addition to the existing 15,500 sq ft of retail space currently producing a rent
of £0.3 million per annum, 180 Great Portland Street will provide a further
90,000 sq ft of retail and office space due for practical completion in December
2006 on a site area of 0.48 acres. Adjusted for subsequent capital expenditure,
at 30 June 2006 180 Great Portland Street had a book value of £51.7 million. The
development will be completed by GPE under a development agreement with The
Partnership. The development agreement provides for the reimbursement of
anticipated costs to complete the development by The Partnership to GPE. While
construction cost risk remains with GPE, letting and other market risks are
transferred to The Partnership.
SW will contribute 79/97 Wigmore Street, 25/27 Duke Street, 35/37 James Street
and 1/7 Picton Place, London W1 ('Wigmore Street'). Wigmore Street currently
comprises 97,300 sq ft of office retail and residential accommodation on 0.76
acres, produces a current rent of £3.5 million and has a current value of £63.1
million.
GPE and SW have agreed to commit up to a further £50.0 million each to The
Partnership in order to fund the potential redevelopment of Wigmore Street and
as a general headroom facility.
GPE will provide strategic asset and development management advice in relation
to The Partnership's properties under a property management agreement with The
Partnership.
Toby Courtauld, Chief Executive of GPE, said: 'We are delighted to have formed
this partnership with Scottish Widows. The Group has used an existing asset to
gain access to future development pipeline which was unlikely to have come to
the open market. 180 Great Portland Street will be completed in a matter of
months and available to let in a resurgent West End office market. Wigmore
Street provides a virtual island site with plenty of scope for significant
redevelopment when the majority of the occupational leases expire at the end of
2008. We look forward to working with our partners to make the most out of these
high quality assets.'
Tom Laidlaw, head of property at SW, said: 'We are pleased to be working with
Great Portland Estates in this newly formed partnership. We forecast that the
central London office sector will see the strongest rental growth and total
returns over the next four to five years and look forward to being involved with
the development of these two exciting properties'.
Contacts:
Robert Noel Property Director Great Portland Estates plc 020 7647 3043
Timon Drakesmith Finance Director Great Portland Estates plc 020 7647 3034
Finsbury
James Murgatroyd 020 7251 3801
Gordon Simpson 020 7251 3801
This information is provided by RNS
The company news service from the London Stock Exchange
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