3 Thames Road Newham - residential Agreement for Lease

CPV: Flats construction work · Houses construction work · Multi-dwelling buildings construction work · Multi-functional buildings construction work · Residential homes construction work · Urban development construction work

Procedure method

Award procedure without prior publication of a call for competition

Legal basis

CELEX · 32014L0024 Public Contracts Regulations 2015 (Directive 2014/24/EU)

Procurement category

Works

Notice status

Awarded without competition

Procurement threshold

Unspecified in notice

Regulatory regime

Standard

Commercial structure

Stand-alone contract (no framework)

Competition type

Direct award (no call for competition)

GPA / WTO covered

Yes (GPA)

Recurring procurement

Unspecified in notice

First published

23 Dec 2021, 16:09 GMT

Last source update

23 Dec 2021, 16:09 GMT

FTS notice number

2021/S 000-032254

Classification (CPV)

Flats construction workHouses construction workMulti-dwelling buildings construction workMulti-functional buildings construction workResidential homes construction workUrban development construction work

Delivery area

London (UKI41)

Official registry OCID

ocds-h6vhtk-030575 Find a Tender

Why no open competition

The procurement falls outside the scope of application of the directive

Published justification

The Contracting Authority (CA) proposes entering into a conditional agreement for lease (AfL) with R Blue Regen TR Limited (Developer), Reef Estates Limited (Guarantor), and Pension Insurance Corporation Plc (proposed Landowner, a pension fund which will own the Site).

Under the AfL, if the Developer develops 161 residential units (the Development, a mixture of private rent, discount market rent (DMR), and London affordable rent units) at 3 Thames Road, Newham (Site) by a longstop date, CA will take a 50-year lease of the Site, acquiring the reversion on lease expiry.

The AfL will be conditional on the Landowner completing Site acquisition, and on a resolution for supplemental planning consent for intermediate affordable homes to be used as DMR homes.

The AfL won't require the Developer to carry out the Development, although it specifies that if the Developer starts the Development, it mustn't depart from a specification in the AfL.

If the Developer doesn't complete the Development by the agreed longstop, or departs from the AfL specification, CA can terminate the AfL and not take the Lease, or still take the Lease.

If the Developer practically completes the Development by an agreed longstop, the supplemental planning consent having been issued and in place for an 8-week lead-in period, CA takes the Lease.

CA pays an £8,200,000 premium (Premium) to the Landowner, on Lease grant, then £1,935,000 annual rent (index-linked).

Under a separate funding agreement between the Landowner and the Developer, the Landowner will fund the Development, including paying a profit to the Developer if the Developer completes the Development and CA takes the Lease. If the Developer fails to complete the Development or becomes insolvent, the funding agreement will give the Landowner funder's rights to step into the AfL and complete the Development. If the Landowner then completes the Development by a longstop, CA still takes the Lease. If the Landowner steps into the AfL as above, CA will, as a deposit, pay an advance payment of the Premium to the Landowner.

If the Landowner steps into the AfL but doesn't finish the Development by a longstop, and/or departs from the AfL specification, CA can terminate the AfL and not take the Lease, the Landowner repaying the Premium to CA, or CA can still take the Lease.

For the above reasons, CA considers that the AfL does not constitute a public works contract under the Public Contracts Regulations 2015, but is an exempt land transaction.

• Pension Insurance Corporation PlcAwarded supplier 14 Cornhill, London, London, EC3V 3NDContact email, phoneShow contact details
• R Blue Regen TR LimitedAwarded supplier 51 Welbeck St, London, London, W1G 9HLContact email, phoneShow contact details
• Reef Estates LimitedAwarded supplier 51 Welbeck Street, London, London, W1G 9HLContact email, phoneShow contact details

No document links were published on the notice.