Acquisition and Development of Land - North West Quadrant, Slough

The proposed transaction comprises two stages: (1) the acquisition of the freehold site by Homes England, and the novation to Homes England (with amendments) of an existing option agreement by which the Council granted certain exclusive rights to North West Quadrant LLP (NWQ LLP); and (2) the intention that Homes England and CSR will enter into a development agreement in respect of the NWQ Site within 12 months of acquisition of the NWQ Site. NWQ LLP is a development subsidiary of Slough Urban Renewal LLP (SUR). SUR was set up in March 2013 as a joint venture between the Council and CSR. SUR’s role was to acquire and develop various sites owned by the Council. NWQ LLP was established in November 2019 specifically in relation to the NWQ Site, and on the terms of specific arrangements set out in a partnership deed concluded at that time. At the same time, the Council entered into an option agreement which granted to NWQ LLP, subject to the satisfaction of certain conditions, an option to acquire the NWQ Site through the grant of leases on a phased basis, and with a view to development. The period of the option was until 22 March 2028. Significant preparatory work has been undertaken by CSR or associated entities but, in light of financial pressures on the Council, further work on the development of the NWQ Site has currently been suspended. Homes England wish to progress the development of the NWQ Site in furtherance of its statutory objectives to improve the supply and quality of housing in England; to secure the regeneration or development of land or infrastructure in England; to support in other ways the creation, regeneration or development of communities in England or their continued well-being; and to contribute to the achievement of sustainable development and good design in England, with a view to meeting the needs of people living in England. This transaction also supports the Government’s ambition for Homes England to respond to the long-term housing challenges facing this country by facilitating the delivery of new homes, where they are most needed, and to deliver a sustained improvement in affordability, using its funding and powers to play a more active role in the housing market, working with partners across the wider housing sector and increasing the pace, scale and quality of delivery. Slough is an area of significant housing need in which there has been significant underperformance in housing delivery. The NWQ Site is a c10 acre key gateway site in Slough, prominent in the town centre, and unlocking this stalled development will significantly increase supply and help to bring forward a significant number of new affordable homes. Homes England also considers that development of the NWQ Site will act as a catalyst and help to bring forward other schemes within the wider area securing regeneration of the town and driving quality housing supply. The existing option agreement prohibits the transfer of the Council’s freehold interest without a covenant by the transferee to observe and perform the Council’s obligations under the option agreement. CSR would require NWQ LLP to stand upon its rights under the option agreement, which means in effect that Homes England would not be able to enter into arrangements for the development of the NWQ Site otherwise than with NWQ LLP or an associated entity acceptable to NWQ LLP and to CSR. Given that NWQ LLP is unable to function effectively under the existing partnership agreements, the option agreement will be novated from the Council to Homes England and from NWQ LLP to CSR, rather than Homes England simply covenanting to observe and perform the Council’s obligations. It is the intention of Homes England and CSR to enter into a development agreement in respect of the NWQ Site within 12 months of acquisition of the NWQ Site, failing which the novated option agreement would terminate. During the 12 month period the obligations on both parties under the novated option agreement are suspended.