The Crown Estate is pleased to announce that we have established a joint venture that will see Canadian real estate company, Oxford Properties, take a 50% stake in the £320 million (approx. €374.3 million) commercial element of our landmark St James's Market scheme.
The deal establishes a strategic partnership based on two 50:50 limited partnerships that will each own 150 year leasehold interests in two blocks located between London's Regent Street and Haymarket. The Crown Estate will retain the freehold and take the lead role to develop and asset manage the scheme in line with our strategy for St James's, where we own nearly 50% of the buildings. Oxford will play an active role in bringing the strength of its global platform and relationships to complement The Crown Estate's team.
Paul Clark, Director of Investment and Asset Management said: "Partnering with an organization of the caliber of Oxford Properties speaks volumes about the market's confidence in our specialist approach to managing third party funds. St James's Market will deliver the most ambitious redevelopment in St James's in the last century and represents a major tipping point for our strategy for the area."
Paul Brundage, Executive Vice President, Senior Managing Director, Oxford Properties said: "St James's Market represents a truly exciting opportunity for us to partner with one of London's foremost property companies on a landmark project that will transform a historic corner of London. Our organizations are not only aligned financially but so too are our beliefs, values, approach and long-term view. We look forward to working with The Crown Estate and bringing our global and local development expertise to realize the vision for St James's Market."
The scheme forms part of The Crown Estate's ten year investment strategy for St James's and, once complete, will provide 210,000 ft² (approx. 19,500 m²) of prime office and 50,000 ft² (approx. 4,645 m²) of flagship retail and restaurant space. A run-down back street service yard and taxi 'rat-run' will be replaced by a fantastic new amenity for St James's, revitalizing half an acre of public realm and creating a new 10,000 ft² pedestrian square for world-class business, shopping and dining.
The St James's Market joint venture is the third major partnership that we have established for our central London holdings in recent years. The Regent Street Partnership, which includes Norges Bank Investment Management, continues to invest in London's premier shopping destination. Next month we are set to complete the £100 million (approx. €116.8 million) Gateway development, a 50:50 limited partnership with Healthcare of Ontario Pension Plan.
The deal with Oxford Properties builds on our strategy to provide working capital for investment in our core holdings, where we retain critical mass and benefits from specialist expertise: London's West End, dominant regional retail schemes; offshore renewable energy; and strategic rural land.
Our ownership in St James's includes four million ft² of retail, office and residential space with a value of over £1 billion (approx. €1.17 bln). Our approach is guided by a clear investment strategy that aims to improve the cohesion of these assets and build on St James's position both at the heart of the West End office market and as a destination for quality retail and dining.
CB Richard Ellis, Capital Real Estate and Hogan Lovells acted for The Crown Estate.
Source: The Crown Estate