Developer Land Securities has secured its profit on the development before it is even built

Land Securities today announced that it has negotiated a payment of 拢71m in respect of its future profits on the 拢250m Park House development on Oxford Street.

Previously, Land Securities forward sold the development to Qatari investment firm, Barwa Real Estate Q.S.C, which paid 拢250m for the site, all of the construction costs and a profit share on completion. Of that 拢250m, 拢225m was paid immediately and 拢25m was to be paid to Land Securities on completion - which is due in November 2012.

Under the new deal, construction plans for the site remain unchanged, with Land Securities continuing to act as development manager.

The original agreement said Land Securities was due to receive a payment of 拢25.0m on practical completion and a further profit share, up to a maximum of 拢50m. The fixed payment will now be made on the earlier of practical completion or 28 February 2013.

As part of today鈥檚 announcement, Land Securities also said Barwa has sold its interests in Park House to SFL3 Ltd, a subsidiary of Shard Funding Ltd, which is the parent company of the London Bridge Quarter.

Commenting on the transaction, Robert Noel, managing director of Land Securities鈥� London Portfolio, said: 鈥淲e are making great progress at Park House and remain committed to working with QNB Capital in producing a world class building.

鈥淭oday鈥檚 transaction converts a contingent future payment into an earlier fixed payment, eliminating risk as we recycle capital back into our development programme, including our latest schemes at 123 Victoria Street, SW1 and 110 Cannon Street, EC4, both of which are due to be completed before Park House.鈥�

 

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