Construction work

Tender description

Welsh Ministers (WM) are entering into a series of land transactions to allow the private sector to deliver new homes, offices and car parking spaces in Cardiff. WM will enter into 3 long leases with 2 legal and general entities which will then each grant a development licence to a developer in relation to the project phases. WM are not conducting a procurement process under the PCR 2015 because the transactions comprise exempt land transactions and not public works contracts. WM are not imposing legally-enforceable obligations to carry out works nor have they specified requirements for the development. In compliance with caselaw, WM are incentivising desirable outcomes supported by negative buy-back controls and reliance on Cardiff Council's planning powers. L&G will grant a lease back to WM of an area which WM intend to fit out and use as a public transport interchange. TfW will formally procure a works contract in order to deliver the transport interchange on the site. In order to facilitate the development set out in Section II.1.4 of this notice, WM will enter into the following transactions: 1) An agreement for lease with Legal and General Capital Investments (‘L&GC’) and the trustees of the BTR Core Fund JPUT (‘L&G BTR’) relating to the long leases to be granted at transactions 3, 4, 5 and 7 below; 2) An agreement for lease with L&GC relating to the long lease to be granted at transaction 6 below, 3) A 990 year long lease with Legal and General BTR in relation to approximately 318 private sector build-to-rent homes and 249 car parking spaces built in accordance with planning permission; 4) A 990 year long lease with L&GC in relation to Grade A office accommodation to be occupied by the private sector and built in accordance with planning permission; 5) An overriding long lease with L&GC in relation to the entire site, with this long lease eventually being transferred into an Interchange Management Company (‘ManCo’); 6) A 990 year long lease from L&GC to WM relating to a non-structural demise of the areas to be occupied by the public transport interchange, the outer shell of which is being built to a specification provided by Rightacres Property Co. Ltd (‘Developer’) (and in accordance with planning consent); and 7) A deed between WG, L&GBTR and L&GC known as the Leaseholders Deed which governs the exercise of rights and reservations, redevelopment and insurance following the grant of the long leases at 3, 4, 5 and 6. The Agreement for lease referred to at 2 above provides that L&GC will grant a lease to the WM of the public transport interchange and retail elements comprised in the development. Completion of the grant of this lease will take place on practical completion of the whole development which will include the public transport interchange and retail elements of the development. The agreement for lease referred to at 2 above will not contain any development obligations on the part of L&GC and will not contain any obligation imposed by the WM (either in these or other documents) which would require the Developer to carry out the development. If practical completion of the development does not take place by an agreed longstop date then the WM will not be obliged to take the lease and either party would be entitled to terminate the agreement. WM will pay a fixed capital premium of 15 800 000 GBP for the lease referred to at 6 above. ManCo will be setup by WM and L&GC and L&G BTR in order to insure the development and to maintain the shared areas of the site with a service charge payable by tenants and occupiers of the property in due and fair proportion. The fit-out of the transport interchange will involve a formal procurement procedure conducted by TfW in accordance with the Public Contracts Regulations 2015. The delivery of L&GC and L&G BTR works related to the above transactions will be carried out by ISG (under management of the Developer and the professional team) pursuant to a development funding agreement between L&GC and the developer. TfW will formally procure in due course, pursuant to the Public Contracts Regulations 2015, a works contract in order to deliver a transport interchange on the site.