A Lendlease and Starwood jv has bought out the partnership redeveloping the £3.5bn Silvertown Quays in East London.
The Silvertown Partnership – consisting of Stuart Lipton’s Chelsfield Properties, First Base and Macquarie Capital – planned more than 3,000 homes and 2.5m sq ft of commercial space on the 62-acre Docklands site.
But after being awarded the scheme in 2013 it has struggled to find finance and work has stalled. It was looking for around £500m for the first 2m sq ft of the site, which includes the Millennium Mills building.
Earlier this year, alongside reports of Lendlease and Starwood bidding for the site, Indian conglomerate Essel Group also threw its hat into the ring, intending to lead the development with an Indian cultural centre.
However, the GLA and the Silvertown Partnership have chosen the Lendlease jv.
Jeff Dishner, global head of real estate acquisitions at Starwood Capital, said: “Working with Lendlease, our vision is to invest significantly into the infrastructure around the site and create a completely new and creative neighbourhood that meets consumer demand, reinvigorates London’s East End and delivers for our investors.”
The ownership of the site is complicated.
Silvertown Quays is owned by GLA Land and Property, a wholly owned subsidiary of the Greater London Authority. After a procurement process in 2012, the GLAP entered into a master development agreement with the Silvertown Partnership, which consisted of Chelsfield Properties and First Base, in June 2013.
According to a voluntary ex ante transparency notice issued today, which is required under OJEU regulations, the partnership has applied for a “change of control event” under the master development agreement, where a Starwood entity and subsidiary of Lendlease Europe buy out the development.
GLAP intends to agree to the arrangement, which would see the pair buy Chelsfield Properties (itself a subsidiary of Chelsfield) and its 33.33% stake in the partnership, and directly buy the remaining 66.66%.
A Silvertown Partnership spokesperson said: “We are very proud of the success of the Silvertown Partnership in unlocking the potential of Silvertown to deliver much-needed homes, including affordable homes, and thousands of jobs for Londoners.
“That vision for Silvertown is now being delivered with the planning consent for 7m sq ft secured and Millennium Mills’ future safeguarded. We wish TSP and its new owners, Lendlease and Starwood, the very best in continuing the regeneration of the area.”
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