Client: Diageo
The credit crunch of mid 2007/early 2008 has made the marketing and disposal of commercial development sites increasingly difficult, as sources of funding have contracted, especially for speculative development.
Wine and spirit group, Diageo sought to dispose of its former transport depot in one of the country’s largest industrial estates, Park Royal in west London. The 5.23 acre industrial/ warehouse development site reflects the remaining parts of the iconic Guinness Brewery, alongside a 55,000 sq ft freehold office building, Coniston House. Diageo appointed our agents to dispose of the site.
Solution
We commenced a targeted marketing campaign during November 2007, and through an informal tender process, selected a fund/developer. Although the transaction progressed into the due diligence phase, concerns over the economy, uncertainty within the investment market and a loss of confidence in the sectors’ future performance saw the fund, in February 2008, renegotiate its offer to a level which was unacceptable to our client.
Our agents subsequently approached a shorter list of purchasers who we felt were able to deliver a transaction on this site before the client’s financial year ended, and ran a further informal tender with those parties.
Result
Not only did we identify Hammersmith Medical Research to acquire the Coniston House premises, we also agreed the sale of the development site in June 2008 to Standard Life and Canmoor. In fact, despite competition from other development sites within the Park Royal area, Diageo’s was the only one successfully sold.
|
|