The fall-out between Pegasus and Axa Sun Life has turned sour with the project managers issuing a high court writ against their former partners over unpaid fees.
Pegasus claims they had an express agreement that Axa would pay them 12.5% of the actual profit on the Cathedral Hill scheme in Guildford, Surrey. The project manager estimates this to be £847,375 based on a £6.75m evaluated profit margin on the development site.
According to the writ, Pegasus was responsible for: site assembly and acquisition, obtaining planning consent, extensive negotiations, supervision of design to building contract stage, and marketing of the scheme.
Axa Sun Life Properties managing director Stephen Smith said: “The writ relates to profit payment but this was never committed to a formal agreement.”
He claimed that Axa was no longer planning a speculative scheme. “The Prime Health prelet was the reason we decided to buy the scheme, but the prelet fell through and the issue now is whether they [Pegasus] are still entitled to payment for that,” he said.
Prime Health had planned to take what, at 13,935 sq m (150,000 sq ft), would have been one of the largest office prelets of 1997 on the proposed Guildford Office Park. With the prelet in mind, Axa bought the site in 1996 from BET for nearly £2m and later acquired the remainder from ESN.
The development agreement with Pegasus on Cathedral Hill was one of the few to survive when Axa severed its six-year relationship with Pegasus in October 1996. The fund decided to wind down its development programme and is now understood to be looking to sell the site.
EGi News 24/06/98
