Birmingham developer completes £470m London property deal

Developer St. Modwen has completed the sale of its interest in a major London residential development.

The 10-acre Nine Elms Square site in London is a 50/50 joint venture with Vinci.

The Longbridge company revealed in June it had had concluded terms for the site with Hong Kong-based Wanda Commercial Properties in a deal worth £470m.

Wanda subsequently transferred its ownership of the Nine Elms Square project to an unnamed third party.

The site has planning permission for 1,800 homes in a cluster of towers that reach as high as 54 storeys.

The wider 57-acre redevelopment of the area brings together different developers who plan to build up to 20,000 homes.

The Nine Elms Square development had been for sale since last August with a deal to an unnamed Chinese investor reported to have fallen through in March.

St. Modwen said earlier in the summer that its cash share of the deal to be £190m, with £70m of that being held in a restricted development account to fund its share of future obligations to complete new market facilities and associated infrastructure.

The remaining proceeds will be used by St Modwen to reduce group borrowings as well as fund ongoing development activity.

The deal had been expected to complete once the former flower market had been demolished.

The Vinci/St Modwen joint venture will have no involvement in the future development of the Nine Elms Square site itself but will remain closely involved in the wider regeneration of the Nine Elms area.

St Modwen’s chief executive Mark Allan said in June that the sale of Nine Elms Square would realise the capital required to fund the construction of more than 500,000 sq ft of new market facilities.

“It also crystallises a significant element of the value we have been able to create on this complex, inner London development site. Together with our joint venture partner, Vinci plc, we remain very much committed to the longer term regeneration of Nine Elms and are excited about the opportunities ahead,” he said.

The joint venture has a development agreement with Covent Garden Market Authority which will see it provide new market facilities for New Covent Garden Market and in doing so, safe-guarding the existing 2,500 market jobs.

There are also 10 acres of development land that is scheduled to be released in phases for future transformation into three distinct character areas.

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