PaddingtonCentral
Few projects can better illustrate the cyclical nature of the property markets
in Central London than our large-scale, urban regeneration scheme adjacent
to London’s West End, which has turned a derelict former railway yard
into a dynamic living and working environment, supported by retail and leisure
amenities. The substantial first phase commenced in 2000 and was fully-let
on completion, some two years later, with your Company’s share of
profit easily surpassing the anticipated level due to strength in both the
letting and investment markets. A further period of four years was to follow
until the property markets were strong enough to support construction of
the second phase, beginning in April 2006. The intervening years have not
been entirely unproductive, as both the completion of the £30 million
‘Crossrail Deck’ and the reopening of the newly widened six-lane,
175-metre long Paddington Bridge on Bishops Bridge Road provided vital new
infrastructure to underpin future phases.
The current phase under construction, a 250,000 sq. ft. office building
at One Kingdom Street and a 206-room Accor hotel, is scheduled for practical
completion in 2008 and is funded by our development partners Morley Fund
Management and DIFA Deutsche Immobilien Fonds AG. Phase three, a 366,000
sq. ft. prime office building known as Two Kingdom Street, has already been
granted detailed planning consent and represents a substantial pre-let opportunity
in a market where occupiers for large space face limited choice from existing
buildings.
CityPark,
Manchester
This mixed-use site was acquired towards the end of 2004 for £3 million.
Whilst outline planning existed for a 94,000 sq. ft. hotel and a 177,000
sq. ft. office building, variation in mix and quantum of space was sought
and achieved in 2006. That part of the site on which the hotel will be developed
has been sold to a reputable hotel operator. We are close to finalising
the forward-funding arrangements for the sale and development of the office
component.
Colindale,
London NW
In November 2006, we were pleased to note that our proposals to redevelop
Oriental City, at 399 Edgware Road, London NW9, received a unanimous resolution
from the London Borough of Brent to grant planning consent for a new mixed-use
scheme to include 300,000 sq. ft. gross retail space and 340,000 sq. ft.
of private and affordable housing, along with associated retail and residential
car parking. It is particularly beneficial that the development will also
include a new 80,000 sq. ft. primary school for 420 pupils, the first primary
school to be built in Brent in the last 50 years. Marketing of the available
accommodation to retail and residential third parties has begun and we are
cautiously optimistic that our original value expectations will be met.
This 7.5-acre property, currently comprising 100,000 sq. ft. of retail accommodation
with 750 car park spaces was acquired in June 2005.
Cavendish
Walk Shopping Centre, Huyton
2006 ended with a more than satisfactory outcome with the completion of
this new 110,000 sq. ft. retail scheme in Huyton, near Liverpool. Acquired
by your Company in January 2005, and constructed by our joint development
partner, CTP Limited, this scheme achieved practical completion in December
2006. This was immediately followed by the disposal to a private investor
for £24.0 million reflecting an initial yield of 5.5 per cent and
generating a net surplus of £5.8 million. On our acquisition of the
site, Wilkinsons PLC was the sole pre-let anchor tenant, with the majority
of the space letting up during construction and against the background of
a weakening retail market, mostly to well known High Street names. We believe
that retailers prefer such thriving and cost-effective locations over expensive
prime pitches, and will continue to seek out similar opportunities in the
future. This project is a good illustration of the synergy between our development
and investment skills. As momentum in the investment market slows, such
a combination of our skill base will prove key to further successful projects.
PaddingtonCentral continues to grow, with a further 250,000 sq. ft. of Grade A office space due for completion in 2008.