Development Securities has announced that it has signed a £41.0 million agreement with clients of Aberdeen Asset Management to forward-fund the development of an 81,000 sq. ft. food store at 399 Edgware Road.
The food store, pre-let to Morrisons, will anchor the £150 million mixed-use regeneration scheme and represents the first stage of development at this significant non-income producing legacy asset.
The funding agreement will release £10.0 million of cash immediately for the land cost of the development site and a further £2.8 million in respect of costs incurred to date since planning was achieved. The construction of the Morrisons food store is now underway with practical completion anticipated in September 2015. Upon the successful delivery of the food store, Development Securities will receive an estimated balancing payment of £5.0 million, representing a profit over the £10.0 million book value of this element of the project.
Planning permission was secured in May 2013 for the redevelopment of 399 Edgware Road in North West London, to transform a 7-acre derelict site into a vibrant new mixed-use community. The first phase of development will deliver a large format Morrisons food store with a 368-space car park and a new 56,000 sq. ft. oriental and far eastern retail and leisure quarter comprising restaurants, public realm and shops. The second phase will deliver a new residential community with a mix of 183 apartments and townhouses as well as a two-form entry primary school.
Progress is now also advanced with regard to the delivery of the retail space and residential quarter which are held at a combined book value of £17.0 million.
Michael Marx, Chief Executive, Development Securities PLC said: “Today’s announcement marks a significant milestone in the development of 399 Edgware Road, a mixed-use community asset which will leave a strong and positive legacy for all those who live and work in this part of London. It is something of which we can be very proud.
The funding for the food store unlocks the first phase of development and will immediately return a significant amount of cash to the business with a future profit from this phase also to flow. We are also making good progress on the delivery of the residential and retail elements of the scheme which are set to realise further significant gains for the Company, and anticipate good news in this respect in the near-term.”
Source: Development Securities