Development Securities and L&Q have entered into a partnership to deliver the residential quarter at 399 Edgware Road – the £150 million mixed-use redevelopment of the former Oriental City site.
L&Q will fund the construction and delivery costs for the development of 183 apartments and town houses, with Development Securities acting as development manager.
The funding agreement will release an initial and immediate land receipt of £16.0 million to Development Securities, generating profits of £4.0 million above the current book value of this element of the scheme. Development Securities will manage the construction, marketing and sales of the residential units which are anticipated to be completed in Q3 2017. Once the construction and sales of the residential units have completed, Development Securities will receive a performance fee and a profit share of approximately £8.0 million.
The funding agreement announced today follows on from the announcement last month in respect of the funding of the Morrisons foodstore at 399 Edgware Road.
Michael Marx, Chief Executive, Development Securities, said: “Today’s announcement demonstrates further excellent progress at 399 Edgware Road and a significant transaction for the Company. The funding of the residential quarter and the Morrisons foodstore have together released £26.0 million of cash, equal to the book value of the entire scheme. These phases could realise combined profits of up to £17.0 million in the near-term to the Company from this previously non-income producing asset.
“The construction of these two phases of the project is now underway and once complete will deliver a flourishing legacy for the local community, with a comprehensive new mixed-use regeneration scheme on land that was previously vacant and derelict.”
Jerome Geoghegan, Group Director of Development and Sales at L&Q, said: “We are delighted to be working in partnership with Development Securities to develop much needed, high quality homes at this landmark site. This agreement will help create a vibrant new quarter in North West London, bringing together an exciting mix of new retail, community and educational facilities with the additional homes that London so desperately requires.”
Planning permission was secured in May 2013 for the redevelopment of 399 Edgware Road in North West London, to transform a 7-acre site into a mixed-use community. The development will deliver a large format Morrisons food store with a 368-space car park, a new 56,000 sq. ft. oriental and far eastern retail and leisure quarter, a new residential community with a mix of 183 apartments and townhouses as well as a two-form entry primary school.