Scarborough Property Holdings is set to buy a 1.5m sq ft development site at Euston Station from Hammerson for around £123m. The developer is buying Hammerson’s Euston Square campus, which includes Network Rail’s head offices. The buildings are held on a long lease from Network Rail expiring 2110.
The campus comprises the 116,000 sq ft 40 Melton Street, occupied by Network Rail until 2012 with a forthcoming break option; the 120,000 sq ft 1 Eversholt Street, let to three tenants on eight leases; and the 70,000 sq ft Grant Thornton House, let to Grant Thornton until 2075, although the tenant is looking to break its lease.
Scarborough beat off stiff competition from Hines, Delancey, and joint ventures between Golfrate and Allied London Properties and Development Securities with GMAC. Scarborough was awarded the contract last Wednesday, and the deal is expected to be finalised by May.
The site forms an integral part of Network Rail’s proposed redevelopment of 15 acres of land behind Euston Station, thought to centre around a Broadgate-style office complex.
Last year, Hammerson had agreed to sell 40 Melton Street and Grant Thornton House to Fordgate, in a £122m deal also including the sale of 21 Moorfields, EC2. However, relations between the two companies collapsed into acrimony when Fordgate failed to complete the deal.
Lambert Smith Hampton is advising Scarborough. Hammerson is represented by CB Richard Ellis.
Scarborough Property Holdings was formed in October 2003, when Kevin McCabe merged investment company, Scarborough Development Group, with Ancient Mariner Properties, Scarborough´s joint venture with Bank of Scotland. The business is separate from McCabe´s quoted property company, Teesland.
Source: Freeman / Estates Gazette