PRUPIM Wants Council To Abandon North Street Developer Selection Process

Published on: 15 Apr, 2013
Updated on: 16 Apr, 2013

The company that is about to acquire the Friary Centre, and several other properties nearby, wants the council to abandon its selection process of a partner to redevelop North Street.

A council report, published ahead of an Executive meeting next Thursday (April 18) which is expected to approve the recommendation of Lend Lease as Guildford Borough Council’s (GBC) development partner, states: “The Council has had recent discussions with PRUPIM concerning PRUPIM’s desire for the Council to abandon the current developer selection process and instead enter into a partnering arrangement with PRUPIM…”

The beginning of the report that is going before the GBC Executive on Thursday evening (April 18th)

It continues: “It would in theory be possible for the Council to either delay or abandon the current developer selection process to afford PRUPIM an opportunity to enter into detailed negotiations with the Council and to demonstrate why it rather than one of the short-listed firms should be selected.

“After giving the matter careful consideration and drawing upon the advice received from Cushman and Wakefield [GBC’s property development consultants] and [legal advisers] Ashurst LLP, officers are of the view that it would be inappropriate for the Council to accede to PRUPIM’s request…”

PRUPIM that already has commercial property interests in Guildford, including Debenham’s and other property in North Street is in the process of acquiring the Friary Centre from Hermes: contracts were exchanged last month. Hermes itself became sole owners only last year, when Westfield sold its interest.

Hermes submitted an expression of interest to be the council’s development partner for the North Street scheme but according to the council report: “… chose to withdraw at an early stage.” Some believe Hermes’s decision to sell the Friary Centre was made when it felt it was not wanted as development partners by GBC.

It is considered possible that the value of property assets currently being sold by Hermes to PRUPIM will be affected by the redevelopment proposals.

Council officers have also acknowledged the risk of PRUPIM challenging the selection process by judicial review or by refusing to sell some properties it owns in the development area.

The report states: “In the event that it is not possible to agree terms with PRUPIM, the Council will need to give serious consideration to the use of its compulsory purchase powers to acquire PRUPIM’s interests in the North Street Site, along with the the acquisition of any other outstanding interest in the North Street Site.

Jonathan Weymouth, Development Director, PRUPIM, said: “PRUPIM remain committed to its investment in Guildford. There is no further public comment on the reports and meetings due this week.”

PRUPIM’s full name is Prudential Property Investment Managers Limited. It owns or co-owns many well-known properties in the UK and around the world, including Manchester Arndale, Finsbury Circus, Green Park Business Park, Westfield Fashion Square, Westfield Garden State Plaza, Oxford Science Park, Bluewater, and Cribbs Causeway. According to its website it has more than £16 billion of assets under management in 740 properties.

According to the IP Real Estate website: “PRUPIM, the real estate investment management arm of M&G, is to change its name to M&G Real Estate at the end of June in what CEO Alex Jeffrey described as a logical step to clear up confusion in the market.

He said: “People increasingly know we’re part of M&G, and that M&G is part of Prudential,” he said. “M&G markets the funds, so the PRUPIM name just confuses investors.”

Prudential insurance remains PRUPIM’s largest client.