New form of PPP launched to fund £450M Croydon redevelopment

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Infrastructure investment group John Laing and Croydon Council today formed a a new model of public private partnership (PPP)  to deliver a £450M joint venture to regenerate significant sites across Croydon town centre and deliver new flagship council headquarters.

 

The deal will create a company known as an Urban Regeneration Vehicle (URV), into which Croydon Council will invest land and John Laing equity. 

Through this limited liability partnership, the council will receive a 50/50 share in profits and will maintain ongoing control of its extensive regeneration agenda by retaining an interest as a partner-landowner as well as through utilising its planning powers.

"Today, more than ever, the public sector is looking for innovation from commercial partners to help maximise returns from their assets," said John Laing Projects & Developments managing director Jamie Kerr.

"Croydon Council is leading the way and we are delighted to be working with them in developing this unique model that will deliver new infrastructure and significant regeneration to the local communities it serves."

The 25 year URV partnership will provide the phased regeneration of four important town centre sites with the creation of two 40 storey towers with approximately 650 residential units; a combination of both private and affordable accommodation.  In total the four sites will create approximately 1,250 new residential units, to be delivered between 2012 and 2017.

The project also includes the delivery of a brand new 2.2HA headquarters office building for the council.  It is anticipated that the council's land value and share of development profit will be sufficient to pay for the building and its running costs for many years.

With the council's long-term regeneration strategy, it also has the option to add additional sites into the partnership as and when further development is required over the next 25 years.

The project has been supported by advisors working in partnership with the URV.  King Sturge (commercial) and Eversheds (legal) acted as advisors to Croydon Council, while  Denton Wilde Sapte (legal), Grant Thornton (financial/tax), EPR Architects (architects) and Knight Frank (property), Faber Maunsell AECOM (ME & Structure), Indigo (planning) and AYH (cost consultants) worked alongside John Laing.

"This is a complex deal achieved in difficult market conditions and the first of its kind completed by a local authority," said King Sturge Financial Services managing director Chris Pratt.

"It will hopefully provide the blueprint for the many council's that are facing similar challenges."