Morgan Sindall ups its stake in waterside regeneration joint venture ISIS

CONSTRUCTION firm Morgan Sindall has increased its investment in ISIS Waterside Regeneration.

The Rugby-based company told the London Stock Exchange this morning that its urban regeneration division Muse Developments has increased its stake in the regeneration partnership from 25% to 50% at a cost of £20.5m.

ISIS, which undertakes regeneration of waterside sites in the UK, is a joint venture between the Canal & River Trust and the investment vehicle Warp 4 Limited Partnership. Muse has acquired the remaining 50% interest in Warp 4 from Igloo Regeneration Property Unit Trust, with the result that Warp 4 is now wholly-owned by Muse.

As part of the deal, Igloo is entitled to a 20% share of net profit in Warp 4 from the development of one of its sites in excess of £17.5m subject to a cap on any such payment of £20m.

At 31 December 2011, Warp 4 had net assets of £35m and incurred a loss of £2m in that financial year from its investment in ISIS. Morgan Sindall suggests the losses generated are expected to reduce significantly in 2012 and 2013 and Warp 4 is forecast to generate profit from 2014 onwards as the ISIS investment in new development projects begins to generate returns.

John Morgan, Morgan Sindall’s chief executive, said: “This acquisition demonstrates our commitment to the regeneration of waterside locations in the UK’s main cities, and underlines the group’s continuing focus on growing the regeneration business.”

The regeneration joint venture is linked with the Icknield Port Loop and Warwick Bar schemes in Birmingham. Its current portfolio of projects includes Islington Wharf in Manchester and Granary Wharf in Leeds.

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