26th Jul 2006 07:01
Great Portland Estates PLC26 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 WigmorePartnership ("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 PortlandStreet, London W1 ("180 Great Portland Street") and £5.0 million in cash. Inaddition to the existing 15,500 sq ft of retail space currently producing a rentof £0.3 million per annum, 180 Great Portland Street will provide a further90,000 sq ft of retail and office space due for practical completion in December2006 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. Thedevelopment will be completed by GPE under a development agreement with ThePartnership. The development agreement provides for the reimbursement ofanticipated costs to complete the development by The Partnership to GPE. Whileconstruction cost risk remains with GPE, letting and other market risks aretransferred to The Partnership. SW will contribute 79/97 Wigmore Street, 25/27 Duke Street, 35/37 James Streetand 1/7 Picton Place, London W1 ("Wigmore Street"). Wigmore Street currentlycomprises 97,300 sq ft of office retail and residential accommodation on 0.76acres, produces a current rent of £3.5 million and has a current value of £63.1million. GPE and SW have agreed to commit up to a further £50.0 million each to ThePartnership in order to fund the potential redevelopment of Wigmore Street andas a general headroom facility. GPE will provide strategic asset and development management advice in relationto The Partnership's properties under a property management agreement with ThePartnership. Toby Courtauld, Chief Executive of GPE, said: "We are delighted to have formedthis partnership with Scottish Widows. The Group has used an existing asset togain access to future development pipeline which was unlikely to have come tothe open market. 180 Great Portland Street will be completed in a matter ofmonths and available to let in a resurgent West End office market. WigmoreStreet provides a virtual island site with plenty of scope for significantredevelopment when the majority of the occupational leases expire at the end of2008. We look forward to working with our partners to make the most out of thesehigh quality assets." Tom Laidlaw, head of property at SW, said: "We are pleased to be working withGreat Portland Estates in this newly formed partnership. We forecast that thecentral London office sector will see the strongest rental growth and totalreturns over the next four to five years and look forward to being involved withthe development of these two exciting properties". Contacts:Robert Noel Property Director Great Portland Estates plc 020 7647 3043Timon Drakesmith Finance Director Great Portland Estates plc 020 7647 3034 FinsburyJames Murgatroyd 020 7251 3801Gordon Simpson 020 7251 3801 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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