CASE STUDY
Newhall Square Birmingham
In 2003 local company St Bernards was selected as preferred developer by Birmingham City Council to redevelop the former Birmingham Science Museum, subject to St Bernards being able to secure a credible joint venture partner capable of funding and delivering a project of this scale. St Bernards approached the RO and in 2004 RO St Bernards entered into a development agreement with Birmingham City Council with RO providing funding and development/project management expertise and St Bernards providing construction management and planning services.
In October 2005 RO St Bernards secured planning consent for 234 apartments, 53,820 sq.ft. of commercial space and 247 car parking spaces. A year later it agreed terms for a pre-let with Travelodge Limited for a 100 bed hotel and as a result varied the commercial element of the planning consent.
The first phase of the development therefore comprised the Travelodge hotel, as well as two speculative refurbished listed buildings totalling 9,471 sqft (NIA) and a speculative new build 10,326 sqft (NIA) office building which at the time of completion was the most energy efficient office building in Birmingham. In addition to Travelodge other phase one tenants included the NSPCC, Co-op, Ormiston Academies and architects, Glancy Nicholls. The Travelodge investment was sold in 2009 to Aprirose for £6m.
The second phase, comprising 234, 1,2 & 3 bed apartments, was put on hold owing to the financial crisis that followed the collapse of Northern Rock in 2007. As markets improved In 2011 ROSB agreed terms for a pre-let with aparthotel operator Staycity and in 2012 they entered into an agreement for lease for 170 serviced apartments.
In 2013 ROSB secured planning consent for the Staycity Aparthotel and started on site in March 2014. Overcoming the problems associated with a contractor going bust, practical completion was achieved in January 2016 and the investment was sold to KFIM Long Income Fund Property Unit Trust for £21m in June 2017 just 3 days after the Brexit vote.
A project which lasted more than a dozen years and blended refurbishment with new build development certainly had its ups and down straddling the recession and a contractor going bust but ultimately ended in a successful exit and the largest individual property transaction ever achieved by the RO.