Qatar and Sellar buy new London Bridge Quarter site

By Paul Norman - Thursday, April 18, 2013 15:05

The State of Qatar and Sellar Property Group have beefed up their land holdings at the £2bn London Bridge Quarter (LBQ), opening the door to further significant development in between their Shard and The Place developments, CoStar News understands.

Market sources said the partners have bought out Sellar’s joint venture partners – CLS Holdings and the family trusts of Simon Halabi – in Fielden House, Sellar Property Group’s long-term offices at the heart of the London Bridge Quarter.

CLS Holdings confirmed last Friday that it had sold its one-third interest in joint venture Fielden House Investment to a “strategic developer” but declined to name the purchaser.

It said the “simultaneous sale of the entity by each of the three joint venture partners implies a value for the property without planning permission of £13.7m, representing a 65% premium over the year end valuation. The group’s share of the proceeds represents an uplift of £1.8m over the year end carrying value”.

The property was bought in November 2006 by the joint venture as it built its holdings in the key London opportunity area. 

Market sources this week told CoStar News that the State of Qatar and development partner Irvine Sellar's Sellar Property Group have bought the investment vehicle.

It marks the final unravelling of a joint venture investment in the area between Sellar, CLS Holdings and family trusts of Syrian investor Simon Halabi that became one of UK property’s most fraught sagas during the last decade.

CLS and Halabi initially joined Sellar as equity investment partners in his ambitious plans for what would become the 2m sq ft London Bridge Quarter in 2003. The trio subsequently went to court over the actual size of Halabi’s stake with final agreement reached that saw each owning a third in the project.

The collapse in the property markets and the complex relationship between the investor consortium then held back further progress.

In January 2008, in one of the most significant property deals of the past decade, Sellar revealed that the project had been unlocked with backing from the State of Qatar in a move that saw four Qatari banks buy out CLS and Halabi's interests.

The four Qatari banks – Qatari Islamic Investment bank QInvest, Qatar National Bank, Qatari Islamic Bank and Barwa – and Sellar Property Group each bought 20% of the issued share capital of the new company, London Bridge Quarter Holdings.

Sellar at the time said the consortium, fronted by QInvest, was set up after nine months of negotiations to buy the interests of CLS Holdings and Simon Halabi’s family trusts. 

It is understood that Sellar and the Qatar consortium have long eyed Fielden House for a significant redevelopment because of its strategic positioning between the Shard and The Place.

The State of Qatar clearly has the financial muscle to view the development of the Shard as a loss-leader for the eventual development of a business quarter that will rival any in the UK.

London Bridge Quarter already includes the Shard, the 95-storey mixed-use tower which completed last year, and the 600,000 sq ft headquarters office building The Place which is just completing. Both were designed by Renzo Piano.

Sellar Developments has also been working with architect Herzog de Meuron on three towers featuring homes, a hotel and shops directly behind the Shard at the St Thomas Street and Bermondsey Street junction and dubbed “The Shardettes”.

The development as a whole has already rejuvenated London Bridge Station, delivering a new bus station and train station concourse that will be linked by a central plaza opening this year.

Fielden House (pictured), at 28-42 London Bridge Street, is a 16,365 sq ft office with street-level retail built in 1912.

Tenants are Sellar Developments, the London Ambulance Service, Melstar and All Bar One.

It currently abuts the Shard and London Bridge Station but is just five storeys high.

All parties declined to comment.

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pnorman@costar.co.uk

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