Procurement of Strategic Development Partner for Proposed Strategic Rail Freight Interchange
Cushman & Wakefield was instructed to identify and procure a development partner to bring forward a 650 acre site in Etwall, Derbyshire as Strategic Rail Freight Interchange comprising 4.5m sq ft of distribution / manufacturing space and a rail linked inland container port. The key objectives were to:
- Achieve best value by successfully bringing forward the development.
- Minimise cost risk by transferring all risk to the development partner.
- Minimise reputational risk to the client.
- Appraisal of the site to identify the development potential.
- Options appraisal of delivery mechanisms – including unconditional sale, conditional sale, planning promotion agreement, development agreement and joint venture.
- The properties were transferred into a SPV
- A two stage procurement process involving a detailed proposal - including financial forecasting and a Business Plan - and a weighted evaluation process to identify a Partner with the requisite skills, experience and financial capability to complete the development and which aligned with the client’s cultural and reputational values.
- The client entered into a Development Agreement under which the Developer bears all of the risks associated with securing planning permission, infrastructure cost and market demand, with a phased drawdown delivering market value and an overage payment for over-performance.
- Reputation risk was mitigated by the imposition of strict environmental and sustainability thresholds.
- The process provided a full audit trail.