Derwent London is pleased to announce that it has exchanged a conditional contract to acquire the freehold of City Road Island EC1, the site of the Moorfields Eye Hospital and the UCL Institute of Ophthalmology.
The site is being sold by Moorfields Eye Hospital NHS Foundation Trust and UCL, together the Oriel joint initiative (“Oriel”), for £239m* before costs. This is subject to receipt of final Treasury approval, which is expected in H2 2022. Completion is also conditional on delivery by Oriel of the new eye hospital at St Pancras and subsequent vacant possession of City Road Island which is anticipated in early 2027.
Derwent London has appointed architects AHMM alongside a full professional team and will undertake significant community engagement as part of its regeneration plans. This important 2.5 acre site, with its c.400,000 sq ft of existing buildings, is located in the heart of the Tech Belt where the Group has substantial holdings. Our early appraisals show the site has potential to deliver a major 750,000+ sq ft campus with generous public realm and strong environmental credentials.
Paul Williams, Chief Executive of Derwent London, said:
“We are delighted to have secured such an important central London regeneration opportunity in the heart of the Tech Belt, where we aim to deliver the next generation of distinctive ‘long-life, loose-fit, low carbon’ commercial space.”
Martin Kuper, Chief Executive of Moorfields Eye Hospital NHS Foundation Trust said:
“This is an important step forward for our plans for Oriel, a new eye care, research and education centre. The sale of our City Road Island, which is conditional on Treasury approval of Oriel, is a key element of our funding strategy. All proceeds will be reinvested in the new centre to secure the long-term future of world-leading eye care, research and education in a way that represents value for money and benefits our patients. We will continue to maintain our strong links with Islington Council as plans for City Road Island progress.”
Professor Alan Thompson, Dean of the UCL Faculty of Brain Sciences, said:
“This is a significant step towards realising the Oriel joint initiative. Oriel will bring together UCL’s formidable research base with Moorfields’ world-class healthcare delivery in one integrated centre of research, education and care.”
Robert Dufton, Chief Executive, Moorfields Eye Charity, said:
“We’re very pleased to reach this significant milestone in achieving Oriel which helps to secure investment in the new world-leading centre for eye health integrating research, patient care and education in a state-of-the-art building and benefitting people on a global scale. Philanthropy has a critical role to play in realising Oriel. We’re very grateful to donors who have committed their support and to those interested in hearing more.”
Initial impact on earnings and NAV
Derwent London is disclosing the following additional information for Listing Rules purposes.
On completion the acquisition is expected to have a marginal impact on the Group’s earnings.
The £239m* consideration to be paid by the Group on completion of the acquisition is in line with the market valuation for the estate which does not yet benefit from planning consent and will be paid from undrawn debt facilities and cash. The contract also contains potential overage arrangements that may be payable based on the planning consent that is achieved and/or any future disposal of the site within an agreed time period. The potential amounts payable in relation to such overage arrangements are subject to an aggregate cap, with such cap also including the purchase consideration to be paid on completion.
* The exact amount depends on the terms of the planning consent obtained as at the point of completion of the acquisition, with £239m being the base consideration.