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LandSec Trillium scoops £700m Aviva contract

News

Julia Cahill

03 April 2004

Mapeley loses out on 25-year contract to manage 6m sq ft portfolio

Land Securities Trillium has secured the largest available corporate outsourcing deal.

The first stage of the Aviva contract, worth £700m over the next 25 years, was awarded to LandSec Trillium ahead of rival Mapeley on Wednesday.

The long-awaited deal ends a fiercely contested battle between the two outsourcing specialists. The decision has been delayed for weeks, largely because of the closeness of the two bids.

Aviva is a major coup for LandSec Trillium, which has built up its position as the largest player in the sector based largely on public-sector contracts.

It is the first private-sector outsourcing deal since LandSec Trillium and William Pears Group bought BT’s property estate in 2001.

LandSec Trillium stands to take over responsibility for the insurance giant’s 6m sq ft portfolio in a staggered property transfer, provided it meets strict performance criteria.

However, industry experts said Aviva would be likely to keep Mapeley “warm” over the next few weeks in case negotiations with its preferred bidder faltered. It hopes to have signed the contract by the end of April.

The first tranche involves 1.8m sq ft of space spread over 50 properties, accounting for around a third of the UK estate.

It includes a portfolio of 18 largely freehold occupational offices in Norwich, Perth, York, Eastleigh and Sheffield, totalling just over 1m sq ft.

The balance comprises surplus, largely leasehold buildings in locations including Basildon, Stevenage and Wolverhampton. The freehold and leasehold liabilities will be transferred to LandSec Trillium.

The three steps

The first stage of the contract includes a major refurbishment project at Aviva’s 400,000 sq ft freehold campus in Norwich. The site includes nine 1960s office blocks, which Aviva wants to refurbish or replace by the end of 2007.

LandSec Trillium will then get the chance to bid for the second and third tranches. The second tranche deals with the substantial part of the remaining portfolio, which Aviva will outsource on a flexible basis.

The third involves a fuller facilities management role.

Mapeley loses out on 25-year contract to manage 6m sq ft portfolio Land Securities Trillium has secured the largest available corporate outsourcing deal. The first stage of the Aviva contract, worth £700m over the next 25 years, was awarded to LandSec Trillium ahead of rival Mapeley on Wednesday. The long-awaited deal ends a fiercely contested battle between the two outsourcing specialists. The decision has been delayed for weeks, largely because of the closeness of the two bids. Aviva is a major coup for LandSec Trillium, which has built up its position as the largest player in the sector based largely on public-sector contracts. It is the first private-sector outsourcing deal since LandSec Trillium and William Pears Group bought BT’s property estate in 2001. LandSec Trillium stands to take over responsibility for the insurance giant’s 6m sq ft portfolio in a staggered property transfer, provided it meets strict performance criteria. However, industry experts said Aviva would be likely to keep Mapeley “warm” over the next few weeks in case negotiations with its preferred bidder faltered. It hopes to have signed the contract by the end of April. The first tranche involves 1.8m sq ft of space spread over 50 properties, accounting for around a third of the UK estate. It includes a portfolio of 18 largely freehold occupational offices in Norwich, Perth, York, Eastleigh and Sheffield, totalling just over 1m sq ft. The balance comprises surplus, largely leasehold buildings in locations including Basildon, Stevenage and Wolverhampton. The freehold and leasehold liabilities will be transferred to LandSec Trillium. The three steps The first stage of the contract includes a major refurbishment project at Aviva’s 400,000 sq ft freehold campus in Norwich. The site includes nine 1960s office blocks, which Aviva wants to refurbish or replace by the end of 2007. LandSec Trillium will then get the chance to bid for the second and third tranches. The second tranche deals with the substantial part of the remaining portfolio, which Aviva will outsource on a flexible basis. The third involves a fuller facilities management role.