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UK: BIDDERS VIE FOR CONTRACT TO MANAGE LU PROPERTIES.
Estates Gazette
15 Jan 2000
More than 40 entities are bidding for a 20-year partnership to manage and develop London Underground's non-operational property.
Bidders are believed to include PFI consortium Mapeley, developers Rodamco, Chelsfield and Hammerson as well as a number of agents including Jones Lang LaSalle and King Sturge, which are presumably putting down markers with a view to forming a consortium later on.
The property is to be transferred to private-sector control in three tranches. The first, which can be bought separately, is a �100m portfolio of shops, offices and leisure units that produces �6.5m pa. A source close to LU said: "None of this is the family silver. It's property that would have been sold anyway, mostly ground rents for offices and hotels, but prime institutional quality."
The second is a 20-year partnership in London Underground's development programme of surplus property, which is estimated to be worth �1bn over the first seven years and at least �2bn over the life of the contract.
The programme includes such high-profile schemes as the redevelopment of Victoria bus station, and aims to use private-sector expertise to speed the flow of development profits to LU.
Negotiations are continuing as to whether the partnership could be extended to surplus property that is owned by the London bus companies and the Docklands Light Railway.
The third, which has to be bid for with the second part, is a management contract, worth close to �30m pa, to run a portfolio of 2,500 tenancies and interests which include shops in ticket halls, offices above stations and retail schemes adjoining stations.
The three parts are expected to go to the same bidder and a source close to the negotiations said: "We think that there are potential benefits in somebody having all three."
Richard Ellis St Quintin, which is advising London Underground, refused to comment on the identity of the bidders but said: "We've had a very enthusiastic response, well into double figures."
Copyright Reed Business Information 2000
Edward Simpkins
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