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STRUCTURE
The City of London Corporation (CoL) as the Freeholder will grant a single non-assignable
three year Call Option Agreement over sites One, Two and Three Shoreditch, which consists
of 22 properties with a total site area of approximately 0.82 hectares (2.02 acres). The Call
Option will enable the Developer to draw down a Development Agreement for each of the three
sites provided that the Developer’s obligations under the Call Option Agreement have been
complied with. Following completion of each phase of the development a new 150 year geared
headlease will be granted.
The following payments apply to the Call Option, Development Agreement and Headlease.
SITE
CALL OPTION
AGREEMENT
PAYMENT
CALL OPTION
LICENCE
FEE PA
The City of London Corporation (CoL) will grant a single non-assignable three year Call Option
Agreement over One, Two and Three Shoreditch. A payment of £6m will be payable by the
Developer upon the grant of the Call Option.
The Call Option will require the Developer to comply with a number of obligations prior to being
able to draw down a Development Agreement on each of the sites.
These conditions will include securing acceptable planning consents in respect of each of the
sites. A planning consent exists in respect of One Shoreditch and part of Three Shoreditch
(10 Blossom Street).
The Developer will have to obtain CoL’s approval to any planning applications prior to
submission. Proposals must comply with the following use / minimum area criteria:
SITE MINIMUM AREA TO BE CREATED PERMITTED USE
area sq m
area sq ft
One 12,774 137,500 (NIA) B1 office space with ancillary retail,
restaurant and public house uses
Two 6,503 70,000 (NIA) B1 office space with ancillary retail and
restaurant uses
Three 3,716
4,180
DEVELOPMENT
AGREEMENT
PAYMENT LICENCE
FEE PA
40,000 (GIA)
45,000 (GIA)
HEADLEASE
PAYMENT
GROUND RENT
Residential or;
B1 offices with ancillary uses
OVERAGE
PROVISIONS
One
£100,000 £7.5m £130,000 5% of rents receivable* Please see
structure
Two £50,000 £5.5m £90,000 Offers 5% of rents receivable*
£6m
document
invited
in the data
5% of rents receivable* or
Three £30,000 £5.5m £75,000
room
£1,000 per residential unit
*subject to a minimum
The Developer will assume responsibility for the management, security and associated costs
of the sites during the Call Option Period (subject to CoL approval). They will be entitled to
retain all rents and other income generated with the exception of the rent payable by the
tenant of Loom Court, 14/22 Elder Street. The Developer will be responsible for securing vacant
possession or agreeing enforceable binding agreements to secure the same.
The Developer will pay to the CoL a licence fee in respect of each site during the call option
period which is payable until drawdown of each development agreement. The licence fees are
as follows:
− One Shoreditch - £100,000 pa
− Two Shoreditch - £50,000 pa
− Three Shoreditch - £30,000 pa
DEVELOPMENT AGREEMENTS
Once all of the conditions set out in the call option agreement have been met the Developer may
call upon the CoL to grant three Development Agreements. The Development Agreements will be
for a duration of five years subject to an obligation to commence construction within 12 months.
On the granting of the Development Agreements the following payments will be made to the CoL:
− One Shoreditch - £7.5m
− Two Shoreditch - £5.5m
− Three Shoreditch - £5.5m
The following licence fees will be payable for the duration of each Development Agreement:
− One Shoreditch - £130,000 pa
− Two Shoreditch - £90,000 pa
− Three Shoreditch - £75,000 pa
If practical completion is not achieved within 36 months of the grant of the Development
Agreement then the licence fee will double.
HEADLEASES
Following completion of a development on each of the sites a new 150 year headlease will be
granted. Each lease will reserve a ground rent payable from practical completion which will be
the greater of:
− 5% of rents receivable for the commercial accommodation; or
− One Shoreditch - £250,000 pa
− Two Shoreditch - £150,000 pa
− Three Shoreditch - £90,000 pa
In the event that Three Shoreditch is developed for residential purposes a ground rent of
£1,000 per residential unit, doubling every 25 years will be payable.
On completion of each site the Developer will make a further capital payment to the CoL.
Offers are invited in respect of these payments.
OVERAGE PROVISIONS
There will be overage provisions relating to the floor areas, residential sale prices and
developers profit.
COSTS
The Developer will bear all of the CoL’s reasonable legal, surveying and other costs in dealing
with this transaction.
44
Shoreditch Estate, London E1
45