Severn Trent PLC - Cushman & Wakefield

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Procurement of Strategic Development Partner for Proposed Strategic Rail Freight Interchange


Severn Trent PLC
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The Challenge

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.

The Solution

  • 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 Results

  • 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.

Contact

Phil Haddleton

Philip Prince

Partner

London, United Kingdom

Phone +44 02032963441

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