The £45 million acquisition, which will see the council become joint owners of the Park alongside Aviva Investors, forms part of the council’s long-term plan to realise a portfolio of commercial investments, within the district, capable of generating stable income into the future.
As funding from central government diminishes, Uttlesford, like other councils across the UK, is seeking alternative routes through which to generate long-term income in order to continue to provide value for money services to residents, businesses and communities, as well as decrease its reliance on central funding.
As one of the most prestigious commercial assets in the district, Chesterford Research Park offers both an immediate stable income stream as well as growth potential.
To fund the project, the council is using its own reserves along with a mix of loans from other local authorities, the government and private funders. The arrangement will generate an initial yield of 5.6 per cent per annum for the council rising to 6.3 per cent by year five.
This follows a lengthy and robust process of due diligence by the internationally renowned commercial agents Cushman and Wakefield and the international law firm Hogan Lovells.
Dawn French, Chief Executive of Uttlesford District Council, said: “Chesterford Research Park is one of the premier commercial sites in Uttlesford and has excellent potential for further growth. We are delighted to be working with Aviva Investors on this initiative and look forward to playing a key role in the continued success of the Park.
“Maintaining a financially sound and effective council is one of the council’s priorities, and we are confident this investment will be of significant benefit for residents and businesses, as well as those with a specific interest in the Park. It will go some way in helping us to bridge the funding gap which will, in turn, enable us to continue to deliver important services to our communities.”
Ed Casal, Chief Executive of Global Real Estate at Aviva Investors, commented on the partnership: “We are delighted to welcome Uttlesford District Council as joint owners of Chesterford Research Park. The Park plays a positive role in the economy of the local district and enjoys a very high profile within the south Cambridge biotech cluster. Uttlesford District Council is the ideal, local partner with whom to collaborate to continue the successful development of the Park.
“Day-to-day management of the Park will continue unchanged, and the existing Park team remain committed to delivering an environment that will nurture and encourage the growth of current and future occupiers. This partnership allows us to look ahead to the next phase of development for Chesterford to ensure we consistently provide the buildings, facilities and services required by life science organisations at every stage of their development.”
Chesterford Research Park provides an innovative, flexible and future proofed environment for both established and early stage biotechnology and pharmaceutical research and development companies including Arecor, AstraZeneca, Charles River Laboratories and Domainex. With a masterplan for around 900,000 sq ft and where approximately 300,000 sq ft of laboratory and R&D space is already occupied, the Park’s low-density development, set within 250 acres of impressive parkland, offers not only ultra-modern and energy efficient laboratory and office space, but also central ‘hub’ facilities within The Nucleus building – which includes a restaurant, café bar, health and fitness centre, and meeting and conferencing space.
The council’s interests at Chesterford will be represented and managed by Aspire (CRP) Ltd, a wholly owned subsidiary of Uttlesford District Council set up to manage this latest investment. A newly formed board of representatives from Aviva Investors and Aspire (CRP) Ltd will meet quarterly to report on current activity and future development plans. Aviva Investors will retain the asset management role at the Park.