RPC, the City law firm, has advised Hadley Mace on the completion of a ground-breaking £225 mln (approx. €265 mln) ‘Public Land Initiative’ deal to develop 645 residential units in East Greenwich.
Hadley Mace is a joint venture partnership between Mace Limited, the international consultancy and construction company, and the developer – Hadley Property Group.
The ‘Heart of East Greenwich’, or ‘Greenwich Square’ as it is now known, is one of the first projects in London to sign-up under the Homes and Communities Agency’s Public Land Initiative (PLI). From April 2012 responsibility for the site now sits with the Greater London Authority pursuant to the Localism Act 2011.
RPC explains that the PLI is a new model designed to get homes built on land owned by public bodies. Under the scheme, developers will be given government land to develop, with payment deferred until the project is complete and the units are sold.
In addition to 645 residential units, the development includes a public square, an NHS health center, retail and restaurant facilities and a new Royal Borough of Greenwich leisure center. Stephen Malley, Partner at RPC, comments: “The Public Land Initiative is a cutting edge tool to unlock development and stimulate house building. Greenwich Square is one of only eight initial PLIs, so this is a mould-setting deal that will help set the bar for similar schemes in the future.”
“Greenwich Square is the perfect example of what PLIs are all about, with sales values that will support the deal without any need for extra grants from the government. Almost half of the units will be affordable housing, much higher than would be the case in a typical development at the moment.”
Jonathan Northey, Senior Associate at RPC, adds: “Since the credit crunch, developers have struggled to access the upfront financing they need to get a project off the ground. The PLI helps to solve that problem by reducing a project’s entry cost. The taxpayer also benefits because there is huge potential for increased gains via profit share, which are well beyond what a straight disposal might achieve.”
“With the Government actively reviewing its unused land holdings and with the need to stimulate the development market, we expect to see the PLI being actively used and extended over the next few years. The Public Land Initiative could be crucial to tackling the chronic shortage of new properties in London and the South East and across the rest of the UK.”
Stephen Malley led the team for RPC, which also included Partner Karen Howard and Senior Associates Jonathan Northey, Simon Hopewell, Chhavie Kapoor and Peter Lowe. The Homes and Communities Agency/GLA were advised by SNR Denton.