Valuation advice for local authority development site
Client: Watford Borough Council
Location: Ascot Road, Watford
Services: Valuations, lease advisory including lease re-gearing/ restructuring, development consultancy
The Brief
Brasier Freeth was initially engaged by Watford Borough Council to provide valuation advice on lease re-gearing matters relating to a twelve-acre development site.
The site, located at the gateway to Croxley Green Business Park and Watford Business Park, comprised the former Sun Printers large printing site which in more recent years had been used as a Royal Mail sorting office.
The Journey
Having vacated the site, Royal Mail sold their 42-year leasehold interest in the 12-acre site to Morrison Supermarkets Plc. Morrisons proposed development of a large supermarket of some 73,000 sq ft on approximately 6 acres of the site.
As the freehold owners, Watford Borough Council was keen to see a comprehensive development of the site to include the provision of a new two-form entry junior school.
Complex negotiations on the lease restructuring took eighteen months and culminated in a new 250-year lease at a peppercorn ground rent on 6 acres of the overall site for a new supermarket. In addition, other leasehold interests were structured allowing the release of a 1.70-acre site for a much needed new junior school. Brasier Freeth negotiated long leasehold terms on the school site with Herts County Council. The remaining 4.3 acres of land is the subject of phase 2 negotiations to re-gear another long leasehold interest, which will then allow redevelopment of this gateway site adjacent to the proposed new station in Ascot Road. The new station is part of the Croxley Rail Link, a major infrastructure project linking the Metropolitan rail line to Watford Junction Station.
The Results
Having concluded the lease restructuring, the supermarket was constructed and started trading in late 2013 and the junior school completed in June 2015.
For the local community, the site has seen significant regeneration, the supermarket has brought much-needed employment to the area and the addition of a new school has been welcomed by the residents.
Brasier Freeth’s involvement on behalf of Watford Borough Council resulted in an initial proposal from Morrisons to re-gear the lease being more than doubled to a significant multi-million pound sum payable to Watford Borough Council.
As well as negotiating much better terms for lease restructuring, we were also extensively involved in the development documentation to ensure that Watford Borough Council’s interests were protected at every stage by allowing for various potential scenarios of non-performance by the parties and alternative development situations in the future.