SCOT Sheridan and MEPC make investment in Glasgow business park

Two leading UK property development companies have signed deals to invest £14m in Clyde Gateway East business park in the East End of Glasgow.

SCOT Sheridan and MEPC will build respectively, 60,000 sq ft and 140,000 sq feet of industrial units on the site, which has lain undeveloped for almost 40 years. The overall investment is worth £14m and will support 700 jobs in one of the highest unemployment areas of Scotland.

The deals have already been hailed by Alex Neil, the Scottish Government’s infrastructure and capital investment secretary, as the first major spin-off from the opening on June 28 of the completed M74 – which passes within yards of the site, and whose Junction 2a leads directly into the business park.

Clyde Gateway East is a new business park on a long-derelict and brownfield site extending to 36 acres at a location four miles south-east of Glasgow city centre.

It is a strategic development being delivered by Clyde Gateway urban regeneration company, with capacity of approximately 400,000 sq ft of business space.It has planning consent for business, general industrial and storage and distribution uses.

The decision by Clyde Gateway to purchase the site and proceed with the development is linked to the proximity of Junction 2a of the completed M74, which opened on June 28.

The total cost of the final development of Clyde Gateway East has been estimated at £35m, and the Masterplan for the site has identified the potential to accommodate up to 1,350 jobs.

Clyde Gateway purchased the site from Scottish Enterprise in March 2009 and adopted a strategy to remediate and provide the requisite infrastructure with a view to de-risking development opportunities for the private sector. In March 2010, Sir Robert McAlpine was appointed as contractor to deliver these initial works which have been completed to coincide with the M74 extension opening.

The first phase of development was sought through a public procurement exercise and will be delivered by SCOT Sheridan, with MEPC as funding partner. It will involve the construction of 60,000 sq ft of speculative industrial development units in three separate buildings of 17,000 sq ft, 20,000 sq ft and 23,000 sq ft.

A planning application has been lodged, with an anticipated site start of September 2011 and completion by April 2012. This will be the first major speculative new-build development scheme to be undertaken in Scotland for over three years.

In tandem with the public procurement exercise, an approach was made to Clyde Gateway by MEPC to acquire further plots at Clyde Gateway East, capable of accommodating another 140,000 sq ft of industrial units to accommodate bespoke requirements, design and build enquiries and subsequent speculative development.

Clyde Gateway, SCOT Sheridan and MEPC have, in addition, agreed a joint marketing and management strategy for Clyde Gateway East. The marketing agents for the first phase being provided by SCOT Sheridan are Ryden and CBRE, and all parties are encouraged by the early positive responses from the market.

SCOT Sheridan Director David MacLachlan said “We believe that this is one of the best industrial sites in west central Scotland and when combined with the modern, flexible business accommodation we intend to build, will have great appeal for potential tenants. The fact that we are building on a speculative basis shows our strong belief that the site has the potential to attract leading businesses and hundreds of jobs and will play a significant role in the regeneration of the area.”

MEPC CEO Rick de Blaby said: “It’s an important strategic acquisition for us, where we hope to replicate and deliver a modern Hillington Park. The infrastructure that Clyde Gateway has committed to this area of Glasgow is enormous and we are happy to invest alongside that.”

Clyde Gateway’s Executive Director of Development Steve Pritchard said “This investment by is the most important day so far in Clyde Gateway’s three-year history. Our vision and ambition for the area can only be achieved if the private sector is willing to back our judgement and bring investment to the various development opportunities we are delivering to the market. It is highly significant that MEPC and SCOTSheridan, two of the most highly respected and prominent firms in the commercial property industry, are prepared to invest in and take up 50% of the capacity of Clyde Gateway East, the first of what will be many large-scale developments within the East End and in South Lanarkshire, and it really does bode well for the future.”

Clyde Gateway East offers a superb opportunity to link new jobs and investment with the M74.

Further information can be found at www.clydegatewayeast.co.uk

Offices To Let

MEPC completes £470m CMBS refinancing with £168.0m prepayment

Release of Milton Park completes the refinancing of the MEPC portfolio.

MEPC, the developer and owner of eight Business Estates across the UK, announces that it will complete its CMBS refinancing strategy on 20 July 2011 with a £168.0m prepayment of the £470m loan securitised via Opera Finance (MEPC) plc. This follows the prepayment of £102.5m in January 2011, £74.5m in April 2011 and the recent announcement to prepay £125.0m on 20 July 2011. MEPC will use a combination of cash from recent disposals and equity, alongside a new seven-year facility of £145m from Deutsche Bank.

This final prepayment successfully completes MEPC’s refinancing strategy a full 12 months ahead of the CMBS maturity in 20 July 2012. The CMBS, completed in November 2005 and arranged by Eurohypo AG, was secured against four of MEPC’s Business Estates – Milton Park in Oxfordshire, Birchwood Park in Warrington, Chineham Park in Basingstoke and Hillington Park in Glasgow.

Rick de Blaby, Chief Executive of MEPC, said, “It is very satisfying to have now refinanced the whole of the £470m CMBS Notes a year ahead of maturity. We have secured the amounts, the terms and the diversity of debt we set out to achieve from banks with whom we have valued relationships. This serves as a very positive endorsement of our strategy, our assets and our management.”

MEPC was advised by Berwin Leighton Paisner LLP on the refinancing of Milton Park, the part repayment of the CMBS transaction.and the associated corporate restructuring. The teams at MEPC and BLP have worked closely together since 2005 when the fund was originally established and more recently on the successful implementation of the full refinancing of the CMBS and overall restructuring of the fund.

MEPC was advised by J.C.Rathbone Associates in identifying an appropriate refinancing strategy to replace the CMBS and in executing the new debt facilities. Caroline Snowden, Head of Structured Finance, JCRA, commented, “We are pleased to have assisted in identifying new lenders for MEPC and in securing four new debt facilities in line with the identified strategy.”