St. Modwen (LSE: SMP), the UK's leading regeneration specialist, has signed a £20 million (approx. 22.8 million) pre-let and development deal for a new 135,000-ft² (approx. 12,500-m²) facility at Teal Park, Lincoln, with Siemens PLC on a 12-year lease.
This new facility will allow Siemens to consolidate its Lincoln-based gas turbine service business, currently situated at four different sites within the City, into one new, high-quality facility at Teal Park. Two of the existing sites are owned by St. Modwen - the 106,000-ft² Firth Road facility and the 735,000-ft² main Ruston Works site, extending over 12 and 23 acres, respectively.
At Firth Road, the service business will continue to occupy 66,000 ft² and will vacate the remaining surplus space at the end of 2012. This will be refurbished and upgraded by St. Modwen before being leased to alternative occupiers. Ruston Works will remain fully occupied as Siemens' Turbomachinery business moves into the space vacated by the service business.
Outline planning permission for Teal Business Park, together with major upgrades to the A46, was granted earlier this year. A detailed application for Siemens' new BREEAM Excellent facility (Building Research Establishment Environmental Assessment Method) will now be submitted to North Kesteven District Council.
The new home for Siemens' gas turbine service business will occupy 11 acres of Teal Park and will be delivered by St. Modwen. It will comprise initially a 50,000-ft² office and an 85,000-ft² state-of-the-art service workshop, together with surplus land to allow for future planned expansion. Building works are expected to start in autumn this year with completion anticipated for December 2012.
Bill Oliver, Chief Executive of St. Modwen, comments: "This deal underlines our increased focus on design and build projects with pre-lettings to high quality tenants. Siemens is a longstanding tenant of St. Modwen, and we have worked closely with them to ensure that we are able to meet the requirements of their strategic relocation to a purpose-built new facility. We will now focus on securing detailed planning, so that we can start on site as soon as possible."