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The Crown Estate is set to confirm a deal with Australian developer Lendlease to buy a stake in the site around London’s Euston station, as part of a joint venture for six projects expected to be worth £22bn once completed.
The King’s property company plans to take a 50 per cent stake in the new joint venture with Lendlease, which outlined the details in an announcement to the Australian stock exchange.
The government appointed Lendlease as “master development partner” for the development of the Euston site in 2018, with plans for a 60-acre redevelopment scheme around the major north London hub.
Two people familiar with the deal told the Financial Times that the Euston site was among the Lendlease properties to be developed as part of the joint venture. The story was first reported by the Telegraph.
The Australian company last year announced plans to sell its UK construction business and divest its British assets as part of a broader restructuring.
Lendlease said in its trading statement that it had plans for a 50-50 joint venture with the Crown Estate for six development projects within its UK development portfolio with a combined value of more than £20bn once completed.
“Negotiations are in late stages with The Crown Estate to . . . release longer-dated capital at or slightly above book value, halve its future funding obligations, accelerate master planning with government clients and generate future fee income,” it added.
The Crown Estate, which manages the monarch’s landholdings on behalf of the general public, is one of Britain’s largest landowners. It has a portfolio of more than £15bn of property including Ascot racecourse and parts of Regent Street in central London and most of Britain’s seabed.
The redevelopment of Euston station is caught up in a wider question of how the government pays for the final leg of the increasingly expensive High Speed 2 rail line from Birmingham to London, which is now expected to cost more than £80bn.
Almost a decade after work started at Euston there is still no agreed plan for the new HS2 station in central London, including how it will be integrated with the existing services.
The previous Conservative government had announced a plan to get private developers to pay for the construction of the new tunnel between Old Oak Common, a HS2 station to the west of London, and Euston. This would be in exchange for a deal to build profitable houses, offices and shops in a major revamp of the old Euston station site.
But chancellor Rachel Reeves announced in the Budget in October that the government would pay £1bn towards the tunnel, which would prevent the work so far from being mothballed.
Other projects that the Crown Estate would gain part-control of through the deal include Smithfield Market in Birmingham; Silvertown Quays in London’s Royal Docks; the Thamesmead Waterside development; the High Road West housing scheme opposite Tottenham Hotspur’ stadium; and the Stratford Cross redevelopment.
The Crown Estate declined to comment.
https://www.ft.com/content/f13f3231-51e6-4b3f-bbe5-52b7e4acc4ed
