Council To Partner With New Friary Centre Owners and Re-evaluate North Street Bids

Published on: 11 Jul, 2013
Updated on: 11 Jul, 2013

Aerial photo showing the North Street redevelopment area

Guildford Borough Council is to partner up with the new owners of the Friary Centre and reconsider bids from the three short-listed development partners for the North Street redevelopment project.

In April, the council Executive was on the verge of accepting an evaluation panel’s recommendation to appoint Lend Lease as their development partner in the face of the Guildford Vision Group’s (GVG) stated preference for Land Securities.

But in a last minute U turn the council announced that all bets were off while they had further talks with PRUPIM, one of the leading UK real estate fund manager’s. PRUPIM, which has recently been renamed M&G Real Estate, was due to take over ownership of the Friary Centre  and other holdings, amounting to 60% of the development area, from Hermes. The deal has now been completed.

The council acknowledged, at the time, that proceeding without PRUPIM’s agreement could have required considerable use of compulsory purchase powers, with the commensurate risk of delay brought by any associated legal challenges and processes.

A council press release states: “The Council’s Executive will consider a recommendation for a potential agreement with M&G Real Estate, and any other North Street site landowners, at its next meeting on Thursday 18 July. The proposed partnership means that the Council and M&G Real Estate will join forces to deliver the North Street development project.

Following approval the council will then invite the three short-listed developers Queensberry Real Estate, Lend Lease and Land Securities to present how they would work with the proposed landowner partnership. The Council’s evaluation panel will then recommended its preferred development partner to the Executive later this year.

GBC Map showing North Street development area in more detail (within blue outline)

Along with the Friary Centre, M&G Real Estate is known to own a number of properties on North Street, and in other parts of the town, including Debenhams on Millbrook. The council say the new approach creates: “…an exciting opportunity to secure the long awaited development of Guildford town centre. The partnership aims to support a collaborative approach to the development of this important town centre site.”

M&G Real Estate has the option of pursuing the judicial review application lodged by Hermes of the council’s decision to grant permission to Waitrose to build a supermarket and housing units on the Bellerby Theatre site. It is believed that M&G will not now proceed with the application in light of the council’s announcement.

The Vision Group also has an application for judicial review over the Waitrose decision lodged. A question remains as to whether a re-evaluation that makes Land Securities the council’s and M&G’s first choice will be enough to persuade GVG to withdraw their application too, or whether there are other issues to resolve.

If the council Executive approve the recommendation of the proposed partnership with M&G Real Estate on July 18 the three short-listed developers Queensberry Real Estate, Lend Lease and Land Securities will be invited to present how they would work with the proposed landowner partnership. The Council’s evaluation panel will then recommended its preferred development partner to the Executive later this year.

How the three potential partners will react is yet to be seen. Preparing bids can be an expensive business and they are already likely to have invested hundreds of thousands of pounds during the first bid process, money which might be considered wasted but which probably forms a tiny percentage of their turnover.

The area to be redeveloped – the north side of North Street on the rightt in the photo, as it looks now

Comments on the news

Cllr James Palmer (Con, Shalford), Lead Councillor for Town Centre Planning and Infrastructure, said: “M&G Real Estate is a well-established international investor and asset manager and one of the largest landowners in the town centre. Its interest in Guildford is a testament to the pedigree and potential of the town’s future.

“After M&G Real Estate’s acquisition of the Friary Centre it is only right that the council pauses to consider the options that this new situation presents. Following positive negotiations for the landowner agreement, we will ask the Council’s Developer Partner Evaluation Panel to reconsider the three short-listed bidders. We want to make sure we select the most appropriate development partner to work alongside the Council and the new landowner partnership.”

Cllr Stephen Mansbridge (Con, Ash South & Tongham), Leader of the Council, adds: “We are very excited at the prospect of entering into partnership with M&G Real Estate with its strong reputation for long term investment. This is big news for Guildford and this proposed partnership will deliver long term funding and the fuel for future growth. Guildford is one of a very few places in the UK which can attract such interest backed with powerful investment and we welcome this partnership with our borough.”

Cllr Caroline Reeves (Lib Dem Friary & St Nicolas), speaking on behalf of the Liberal Democrat Group said: “Given the importance of the decisions to be made about the town centre in the coming months, the Lib Dem group welcomes the opportunity to work in collaboration with M&G Real Estate towards securing the best possible   decisions for the future of the town.

“Partnership working will, at last, enable positive action to regenerate North Street. By collaborating in a landowner partnership we can ensure that we have a scheme that will integrate with the whole town centre, and create an opportunity for Guildford to continue to flourish in the future.”

Cllr Angela Gunning (Lab, Stoke) Leader of the Labour Group said: “This is indeed good news and ends some of the uncertainty of previous months. I look forward to the next steps being concluded swiftly, and we can move forward to a  redevelopment Guildford can be proud of in the years to come”

Bob Mogford, Director of Investment at M&G Real Estate, said: “Following the completion of our acquisition of The Friary Centre and associated holdings, this significant step of beginning to develop a landowner agreement between M&G Real Estate and Guildford Borough Council is undoubtedly good news for the town. As the primary landowner, we have always maintained that we are a critical part of how the regeneration of the North Street site can be achieved and this is a big step forward.

“We want to see Guildford flourish for generations to come and this proposed landowner partnership begins to pave the way for real action on North Street, which is so integral to the success of The Friary Centre and the whole town.”

Bill Stokoe, speaking as the chairman of the Guildford Society, said: “We’ve yet to see the detail and terms, but this is a very good step forward. I’m pleased to see that GBC and M&G are moving towards a productive relationship. It just makes sense. It’s a relationship from which we the residents and ratepayers should also benefit as a reinvigorated town centre becomes a reality.”

Graham Hibbert, Chairman of the East Guildford Residents Association (EGRA) said: “EGRA welcomes the decision by GBC and M&G Real Estate to work together. It promises a better coordinated renewal of this quarter in the town. Residents tell EGRA that they want a resilient mixed development of shops, houses and public places which will thrive no matter what changes the future brings.

“They want buildings of inspirational design and appropriate scale. They want the development to be accessible through the inclusion of a central bus interchange that provides full connectivity to all sides of the town.

“Most importantly residents look to GBC to safeguard the public interest in contracts with developers, as much publicly owned land is involved, and they want to be properly engaged in the thinking of what is to be built at key points during the planning of the project and well before the planning application stage.”

The Guildford Vision Group has also been invited to comment.

M&G appoint new letting advisers

It has also been announced that M&G Real Estate have appointed CBRE and Lunson Mitchenall as letting advisers for The Friary Shopping Centre in Guildford.

In an article published by ‘Co-Star Group’ it is stated: “Spanning 150,000 sq ft, The Friary Centre’s tenants include brands such as Hollister, Topshop and Urban Outfitters.

“The leasing teams will work to further strengthen The Friary Centre’s retail mix and it is hoped that further announcements on new lettings will be made later this year.

“Scott Linard, director, asset management & leasing for M&G Real Estate, said: ‘The Friary Centre is the regionally dominant retail scheme in Guildford and serves the town’s affluent catchment well. The appointment of CBRE and Lunson Mitchenall is in-line with our strategy to reinforce the centre’s position as a strong retail destination, with a particular focus on improving its fashion line-up and catering provision.’”

Share This Post