Section one: Contracting authority/entity
one.1) Name and addresses
LONDON BOROUGH OF NEWHAM
1000 Dockside Road
London
E16 2QU
Contact
Andrew Ireland
Telephone
+44 2033737104
Country
United Kingdom
NUTS code
UKI41 - Hackney and Newham
Internet address(es)
Main address
one.4) Type of the contracting authority
Regional or local authority
one.5) Main activity
Housing and community amenities
Section two: Object
two.1) Scope of the procurement
two.1.1) Title
3 Thames Road Newham - residential Agreement for Lease
two.1.2) Main CPV code
- 45211360 - Urban development construction work
two.1.3) Type of contract
Works
two.1.4) Short description
The Contracting Authority proposes to enter into an Agreement for Lease with a developer and a proposed landowner under which, if the developer develops 161 residential units (comprising a mixture of private rent, discount market rent and London affordable rent units) at 3 Thames Road, Newham by an agreed longstop date, the Contracting Authority will take a 50-year lease of the property, with an agreement to purchase the reversion at the end of the lease term.
two.1.6) Information about lots
This contract is divided into lots: No
two.1.7) Total value of the procurement (excluding VAT)
Value excluding VAT: £104,950,000
two.2) Description
two.2.2) Additional CPV code(s)
- 45211300 - Houses construction work
- 45211340 - Multi-dwelling buildings construction work
- 45211341 - Flats construction work
- 45211350 - Multi-functional buildings construction work
- 45215214 - Residential homes construction work
two.2.3) Place of performance
NUTS codes
- UKI41 - Hackney and Newham
Main site or place of performance
3 Thames Road, Royal Docks, Newham E16 2EZ
two.2.4) Description of the procurement
The Contracting Authority proposes to enter into an Agreement for Lease with a developer and a proposed landowner under which, if the developer develops 161 residential units (comprising a mixture of private rent, discount market rent and London affordable rent units) at 3 Thames Road, Newham by an agreed longstop date, the Contracting Authority will take a 50-year lease of the property, with an agreement to purchase the reversion at the end of the lease term.
two.2.11) Information about options
Options: Yes
Description of options
The Contracting Authority will have an option to purchase the freehold reversion from the landlord for £1, at the end of the 50-year term of the Lease. The landlord will also be able to require the Contracting Authority to purchase the freehold reversion for £1, at the end of the 50-year term of the Lease.
two.2.14) Additional information
The total value of the procurement referred in 11.1.7 above does not take account of inflationary rent increases during the 50 year lease term.
Section four. Procedure
four.1) Description
four.1.1) Type of procedure
Award of a contract without prior publication of a call for competition in the cases listed below
- The procurement falls outside the scope of application of the regulations
Explanation:
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.
four.1.8) Information about the Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement: Yes
Section five. Award of contract/concession
A contract/lot is awarded: Yes
five.2) Award of contract/concession
five.2.1) Date of conclusion of the contract
2 November 2021
five.2.2) Information about tenders
The contract has been awarded to a group of economic operators: Yes
five.2.3) Name and address of the contractor/concessionaire
R Blue Regen TR Limited
51 Welbeck St
London
W1G 9HL
Telephone
+44 7747536644
Country
United Kingdom
NUTS code
- UKI32 - Westminster
Internet address
http://www.reefgroup.co.uk/contact
The contractor/concessionaire is an SME
No
five.2.3) Name and address of the contractor/concessionaire
Reef Estates Limited
51 Welbeck Street
London
W1G 9HL
Telephone
+44 7747536644
Country
United Kingdom
NUTS code
- UKI32 - Westminster
Internet address
https://www.reefgroup.co.uk/contact
The contractor/concessionaire is an SME
No
five.2.3) Name and address of the contractor/concessionaire
Pension Insurance Corporation Plc
14 Cornhill
London
EC3V 3ND
cawthorn@pensioncorporation.com
Telephone
+44 8006527000
Country
United Kingdom
NUTS code
- UKI31 - Camden and City of London
Internet address
https://www.pensioncorporation.com/
The contractor/concessionaire is an SME
No
five.2.4) Information on value of contract/lot/concession (excluding VAT)
Total value of the contract/lot/concession: £104,950,000
Section six. Complementary information
six.4) Procedures for review
six.4.1) Review body
Her Majesty's High Court of Justice in England
Royal Courts of Justice, Strand
London
WC2A 2LL
Telephone
+44 2079476000
Country
United Kingdom
Internet address
https://www.judiciary.uk/you-and-the-judiciary/going-to-court/high-court/