In recent years, joint ventures have formed an important part of our investment strategy. Today, we have three active joint ventures, with well-respected partners, holding around 23% of our portfolio.
Our joint ventures
With our partners we have invested in and developed some of London’s most exciting properties, including 240 Blackfriars Road, SE1, 95 Wigmore Street, W1, 160 Old Street, EC1 and our development at Hanover Square, W1.
We categorise our joint ventures into two types:
- Access to new properties
- Risk sharing
Our three active joint ventures continue to represent an important proportion of the Group's business. At 31 March 2022, they made up 21.1% of the portfolio valuation, 27.6% of net assets and 22.8% of rent roll.
Access to new properties
Creating a joint venture is an effective way for us to unlock properties, which otherwise might not be available on the market. Providing skills and expertise to our joint venture partners, we help reposition the properties and maximise returns.
An example of our track record - the Great Wigmore Partnership
To establish the Great Wigmore Partnership, we contributed our newly completed office development at 180 Great Portland Street, W1, whilst Scottish Widows (now Aberdeen Asset Management) contributed a first class development site next to Selfridges on Wigmore Street, W1.
The Wigmore Street site entered our development pipeline, with planning permission for 95 Wigmore Street, the main office building, achieved in 2007. 180 Great Portland Street was later sold in 2008. We started construction on 95 Wigmore Street in 2011 and delivered the completed BREEAM Excellent building into a resurgent rental market in July 2013.
The offices were fully let within six weeks of completion at an average rent of £84.50 per sq ft. In April 2015, we sold the building for £222.4 million setting a new benchmark low yield for this part of the West End at 3.4%. The sale crystallised a profit on cost since commitment to the development of 105%.
Risk sharing
Where projects are of sufficient scale or represent a significant development risk we often consider bringing in a partner to share in that risk.
The GHS Limited Partnership
In November 2013, we created a 50/50 joint venture with the Hong Kong Monetary Authority (HKMA) to own and develop the Hanover Square Estate, a prime, mixed use and fully consented development site that GPE created in the heart of the West End. GPE transferred the properties into the partnership for £202.0 million.
This substantial site sits directly above the eastern ticket hall of the new Bond Street Crossrail station and represents one of the most exciting development opportunities in the West End. Our partnering with an organisation of the calibre of HKMA is a strong endorsement of the project’s potential. We are currently on site with the scheme set to deliver 221,200 sq ft in total with completion expected in Q3 2020.