Legal & General is in discussions with Sheffield City Council and its development partners Urbo and Peveril Securities, the property arm of Bowmer & Kirkland, over investing in the regeneration of West Bar Square.
The 7.33-acre site has outline planning permission for up to 1.5m sq ft of mixed-use space, including up to 914,932 sq ft of offices, up to 538,195 sq ft or 525 residential units, up to 215,278 sq ft of hotel space and 53,819 sq ft of retail and leisure space.
It is proposed that to bring the regeneration scheme forward the council would agree to take on the lease of the first office building to be delivered in the first phase at the site by Urbo.
The rental deal would be for 40 years and “well below market value”, which would create a profit/rent buffer for the council over the course of the lease and at the end of the lease the council would have the option to buy the building for £1.
At the same time, Legal & General Capital, the regeneration funding arm of L&G, would fund the development by Urbo of 345 build-to-rent flats, a multi-storey car park and public realm, which would ultimately form phase one of the West Bar Square development.
Legal & General Capital would also fund the development of a second 100,000 sq ft office to start on site either when the first office building is 85% let or two years after its practical completion.
It would represent £150m of investment by Legal & General Capital in the scheme over the next five years.
If agreed at the council’s cabinet meeting next week, it is anticipated that the first phase would start on site in 2020.
It is the latest regional regeneration project Legal & General has entered into partnership on, having previously agreed to help deliver MediaCity in Salford, Newcastle’s Science Central and Cardiff Square in Wales.
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