St. Modwen Properties today announces that VINCI St. Modwen, its 50/50 joint venture with VINCI plc, has exchanged contracts for the sale of its interest in the 10-acre Nine Elms Square site in Nine Elms, London to Wanda Commercial Properties, for a cash consideration totalling ca. €533.3m (£470m). Completion is expected to occur later in the summer, following demolition of the former flower market.
Taking into account its stake in the joint venture and the joint venture’s contractual obligations to the Covent Garden Market Authority, St. Modwen expects its share of VSM’s cash proceeds after overage, enabling costs, and tax to be c. €215.6m (£190m) upon contractual completion, of which €79.4m (£70m) will be held in a restricted development account to fund its share of future obligations in respect of completion of 500,000 ft² of new purpose built market facilities and associated infrastructure €158.9m (£140m) in total for VSM.
The remaining proceeds will be used by St. Modwen to reduce Group borrowings as well as fund ongoing development activity. The Company expects to report an outcome for the transaction in line with book value, which includes a full provision for its share of future market construction obligations.
Following the sale and over the course of the next 10 years, VSM will remain closely involved in the wider regeneration of the Nine Elms area through its development agreement with CGMA which will see it provide new market facilities for New Covent Garden Market and in doing so, safe-guarding the existing 2,500 market jobs. As the joint venture progresses with the delivery of the new market, the remaining 10 acres of development land will be released in phases for future transformation into three distinct character areas; to be known as Nine Elms Gardens, Nine Elms Grove and Thessaly Road that will feature a vibrant mix of residential, commercial, retail and leisure uses.
VSM will have no involvement in the future development of the Nine Elms Square site itself which will now be progressed by Wanda HK.
