The UK’s Morley Fund Management has taken control of the final two phases of the £700m PaddingtonCentral development in London.
It has exercised its pre-emption right to buy the 50% it did not own from UK institution Equitable Life for the £500m phases two and three. Morley and Equitable will remain 50:50 partners on the completed £200m first phase.
The completed scheme will comprise 176,515m2 of office, retail, residential and leisure on a 4.5ha site north of Paddington rail station. The first phase is fully let to occupiers including Prudential, Chiltern and Kingfisher.
Morley has also committed £40m to the next phase to allow the construction of the deck, which will enable the proposed Crossrail connection to run under the site. Crossrail will run from west London, linking Heathrow airport into central London through the City and out east to the Thames Gateway.
Wally Kumar, director of Development Securities, which is developing the scheme, said it was keen to get the deck completed by Easter to be able to make a decision on the timing of phase two. He said that the change in ownership could smooth the passage for any decisions over speculative development for phase two.
“It means dealing with one fund rather than two and, given the condition that Equitable Life is in as a fund, it was always going to be difficult for them to match Morley’s expenditure. It is now in the hands of a fund with the finance and inclination to start speculative development.” Equitable Life almost collapsed four years ago when it emerged that it could not honour its life insurance policies.
