Shaftesbury PLC announces that it has agreed, subject to shareholder approval, to establish a joint venture with the Mercers' Company. Shaftesbury and the Mercers' Company (together the "JV Partners") will each contribute assets worth £81.14 million and will each own 50% of the JV. The leases to be owned by the JV have been valued at £118.47 million. Shaftesbury will be appointed as project manager and will bring to the project its specialist experience of regeneration in London's West End.
The JV Partners own adjacent freeholds and leaseholds which together form almost the whole of an island site extending to approximately 1.92 acres on the western edge of Covent Garden. The combined island site has frontages to Long Acre, Upper St.Martin's Lane, Shelton Street and Mercer Street. The existing buildings have a total net area of approximately 246,000 ft² of which offices and car parking currently account for approximately 60%.
The combination of the properties will allow the phased reconfiguration and refurbishment of the entire site. Current plans, which are subject to obtaining the necessary planning consents, envisage the creation of additional retail and leisure space with new pedestrian routes through the site, and improved quality of office and residential accommodation. These changes are expected to generate additional rental income and capital value over the medium and long term.
The JV Partners currently envisage that the phased reconfiguration and refurbishment of the site will take about seven years.
Commenting on the announcement, Jonathan Lane, Chief Executive of Shaftesbury, said: "We are pleased to establish this joint venture with The Mercers' Company who share our long term investment strategy. The combination of our adjoining ownerships in Covent Garden, harnessing our proven experience with mixed use West End schemes, offers exciting opportunities to increase income and values over the medium and long term. Each partner's neighbouring holdings should also benefit from this project."
Michael Soames, The Surveyor to the Mercers' Company, said: "The Mercers' Company have owned these properties for several hundred years and we are delighted to be working with Shaftesbury on the exciting regeneration of this area of Covent Garden as well as re-acquiring the freeholds of the rest of the block."