Land Securities Trillium, the specialist outsourcing arm of Britain’s largest property company, has completed its long-running negotiations with the BBC for a lucrative PFI-style deal.
It has entered into a property partnership with the BBC, which combines property development, financing and facilities management over a 30-year contract.
As part of the deal, LS Trillium will handle the management and servicing of the 4m sq ft that makes up the BBCs Scottish and London estates.
The ownership of the BBC’s flagship White City building and development site in west London will be transferred to LS Trillium, and Land Securities Development will carry out the development of a 52,095 sq m (550,000 sq ft) scheme. The complex will include new offices, a broadcasting centre and playout facility.
Between now and 2003, LS Trillium will invest £220m in White City, which will provide the first phase of the development. It will also pay the BBC £35m for the contract.
The contact begins on12 November 2001. In return the BBC will pay LS Trillium a £35m pa unitary charge covering facilities management and estates strategy. This figure will rise to £70m pa on completion of the White City project at the end of 2003 to account for the provision of the new accommodation.
LandSec said that the management of the remaining 3m sq ft of the estate may be transferred to the partnership over time. Future opportunities for the partnership include the redevelopment of Broadcasting House, London and the new headquarters for BBC Scotland at Pacific Quay, Glasgow.
Ian Henderson, chief executive of Land Securities, said: “This is a further step towards securing additional earnings through partnerships with organisations that wish to divest their property portfolios in order to focus on their core activities. We look forward to delivering a first-class service to one of the worlds leading broadcasters.”
Knight Frank, PricewaterhouseCoopers and GVA Grimley advised LS Trillium on the deal.
Manish Chande, LS Trilliums chief executive, added: “We are looking forward to an exceptionally productive and close partnership with the BBC. This is an excellent opportunity for LS Trillium to push the boundaries of property management. As the BBC meets the challenges facing the broadcasting industry, LS Trillium will take great pride in providing it with the infrastructure to operate successfully.”
EGi News 17/09/01
