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LandSecs confirms CPPIB Victoria JV

By Paul Norman - Wednesday, February 15, 2012 10:05

Land Securities confirmed this morning that it had formed a 50:50 joint venture with Canada Pension Plan Investment Board to own and develop the £1bn Victoria Circle project in London, SW1.

The Victoria Circle Limited Partnership will bring forward a development comprising five buildings occupying the island site opposite Victoria Station bounded by Bressenden Place, Victoria Street and Buckingham Palace Road, SW1.

The earliest the first phase and the final two phases will be delivered are 2016 and 2018 respectively.

When complete, it will provide a 910,000 sq ft mix of houses, offices, shops and public amenities with an estimated value in excess of £1bn.

Land Securities has sold the existing properties on the 5.5 acre Victoria Circle site to the Partnership for £163m.

The buildings are let until September 2012 - the earliest date at which demolition can start. Land Securities will receive payment on 28 September 2012.

Robert Noel, managing director of Land Securities' London Portfolio, said: "Having signalled our intention to seek a partner on this project, we're delighted to have teamed up with CPPIB. Victoria is changing, and the transaction is a great vote of confidence in our plans for this part of the West End."

Graeme Eadie, senior vice-president, Real Estate Investments, CPPIB, said: "We are excited to be an investor in this transformative development project in a prime area of London's West End. The Victoria Circle project supports CPPIB's real estate strategy to own and develop properties in key markets for the long term. We look forward to working with Land Securities, a best-in-class partner with deep knowledge of the UK real estate market."

Land Securities has been appointed development manager by the Partnership and as part of this role, will be responsible for leasing all the retail and office space as well as selling the private apartments.

Land Securities appointed CBRE at the end of last year to find a joint venture partner for the project.

The REIT has been increasingly turning to joint venture partners on its major projects to spread its exposure to leasing campaigns in key markets. Most notably it has teamed up with Canary Wharf to bring forward its 20 Fenchurch Street tower site in the City.

pnorman@costar.co.uk