Land Securities is turning its hand to hospital development as part of a large mixed-use scheme in London.
Britain’s biggest quoted property company has formed a new joint venture with a renowned US medical group to build a 150-200-bed private hospital at the heart of an expected urban regeneration project of around 1m sq ft.
The Cleveland Clinic originally approached LandSec about one of its existing central London sites – thought to be either its proposed Cardinal Place, SW1, or New Fetter Lane, EC4 – but the site proved unsuitable.
Other LandSec schemes may still be considered, but the developer is keen to use the hospital to unlock development opportunities elsewhere in central London and generate income for a new acquisition.
LandSec development director Mike Hussey said the jv was looking for one site initially, potentially including the hospital within a tower or large, single building.
The partners are looking for a site that could support a hospital and outpatient clinic with a minimum floorplate of 350,000 sq ft and want vacant possession by the end of 2006, if not sooner.
A requirement has been sent out through FPDSavills to other agents. The clinic’s preference is for a site west of the City, with Notting Hill high on the list.
Sites on the South Bank, City and City fringe will be considered, but Docklands has been ruled out.
Hussey said: “We’ve got a fair amount of influence in the market and they need development expertise. This hospital is the kind of thing that London doesn’t have.”
He hoped that planning authorities would look more favourably on an application that includes the hospital.
The project will be jointly funded by LandSec and the Cleveland Clinic, but the exact structure of the jv has yet to be formalised. The classic model would be a straight jv linked to exit value, but if there are more commercial uses involved LandSec is more likely to take full risk, with the clinic taking a long lease on the hospital itself.
The clinic, best known as a leader in cardiology and cardiac surgery, is a private, non-profit group with a 1,000-bed hospital in Cleveland, Ohio, outpatient services, a research institute and education foundation. It also owns the Cleveland Clinic Florida.
Its move into the London market has been prompted partly by the need to cater for its overseas patients, particularly from the Middle East , who are less willing to travel to the US in the current security climate.
Liell Francklin, director of West End agency at FPDSavills who is working on the requirement, said: “This is an innovative venture for LandSec and obviously a departure from its traditional London development strategy.”
