Category: Â鶹Éç
Date: 12.05.2005
Printable version
Â鶹Éç and Land Securities are to reorganise their property partnership
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In September 2001 the Â鶹Éç entered into a partnership agreement with Land Securities' property outsourcing business, Land Securities Trillium (LST), to carry out the Â鶹Éç's ambitious property redevelopment programme across the UK, provide the finance for the new construction and to manage a range of facilities management and other property services for the Â鶹Éç.
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The partnership has successfully delivered the 550,000 sq ft of new buildings at White City and work is well underway on construction at Pacific Quay in Glasgow and Broadcasting House in Central London.
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The new Pacific Quay building was 'topped out' on 22 April and Phase 1 of the Broadcasting House redevelopment is nearing completion now.
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Radios 2 and 6 Music are due to move to the new facilities in September 2005 and the rest of Radio will begin to move in at the end of the year.
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The outsourcing arrangement has, over the four years to date, saved the Â鶹Éç over £30m out of the £109m cost savings projected over the 30 year life of the deal.
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In March of this year, the Â鶹Éç and LST restructured the financing of the completed White City development through the issue of a further tranche of low cost bonds.
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This resulted in the Â鶹Éç reducing its financing costs by £60m, and LST realised a profit of £23m.
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The construction programme is well underway and because the finance for it is now all provided by third parties, the Â鶹Éç and LST have been reviewing the ongoing nature of the partnership which now has two elements; construction and facilities management.
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LST offers facilities management services as a component of its overall offer, but not as a principal service.
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Therefore, both parties have agreed to restructure the partnership concentrating in the future on completion of the developments at Glasgow, Central London and other potential developments.
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As a result of this mutual decision, the Â鶹Éç will shortly begin a procurement exercise by placing an advert in the EU Journal, seeking bids from interested parties to provide the Â鶹Éç with facilities management and other specialist property services for the next five to ten years.
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The Â鶹Éç expects to extend the range of property services outsourced in this exercise.
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These changes will help Â鶹Éç Property deliver its £42m target which is part of Director-General Mark Thompson's pan-Â鶹Éç Value for Money initiative.
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Because LST does not offer a facilities-management-only
service, it has decided not to participate in the re-tender process,
but will manage the existing outsourcing contract until at least March
2006.
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John Smith, Chief Operating Officer, Â鶹Éç, said: "Without Land Securities we would not have achieved so much in reforming our estate and improving the quality of the services. We are very pleased to continue working together on our most important construction projects."
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Francis Salway, Group Chief Executive, Land Securities, said: "We are delighted to have worked with the Â鶹Éç to achieve a key strategic goal and look forward to progressing to the next stage of our relationship with them.
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"Property outsourcing is, by definition, flexible and we are pleased to have agreed a restructured contract which meets the Â鶹Éç's future property and facilities management needs."
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Notes to Editors
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The Â鶹Éç will seek bids from companies wishing to provide all advertised services or any individual service
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Broadcasting House in Central London is a flagship redevelopment which is creating the world's largest live broadcasting centre.
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Phase 1 of the construction includes the building of a new wing to the original listed BH, the restoration of the listed interiors of BH and the refurbishment of the adjacent building, Western House.
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Phase 1, nearing completion, provides a new home for all of the Â鶹Éç's radio networks and allows for the demolition of the Sixties and later extensions to BH.
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Phase 2 is due to begin in August 2005.
