Henry Boot Secures a Contract To Develop A £333m Scheme
A £333m scheme is set to be developed by UK-based Henry Boot property development group. The scheme will include a new conference and exhibition centre, a four star hotel and an energy centre. The contract, with Aberdeen City Council, has been agreed for a location adjacent to Aberdeen International Airport, on the 130-acre former Rowett Research Institute site.
The hotel is set to operate under the Hilton Hotels brand and received planning permissions at the end of 2015.
“We are delighted to have been selected by the Aberdeen City Council to develop the city’s new exhibition and conference centre, four-star hotel and energy centre,” said Jamie Boot, the Chairman of Henry Boot.
“We remain mindful of the challenges facing our industry after the result of the EU Referendum, taking into consideration this current market backdrop, we maintain a cautious outlook and as such the Board’s expectations remain unchanged,” he added.
As part of the contract, another 150-bedroom hotel has been planned and is set to be operated by the Aloft Hotels brand, subject to approval of planning permissions.
The site project has been appointed to the Robertson Construction Group and is expected to be completed in the first half of 2019.
In drafting and completing the contract, DLA Piper and Addleshaw Goddard served as legal advisors to Henry Boot, with teams led by Steve Edgecombe and Ben Peacock respectively.
Interview – Steve Edgecombe DLA Piper LLP:
Please tell me about your involvement in the deal?
I was approached by Henry Boot Developments in the summer of 2013, requesting DLA Piper act as replacement legal advisers, when they realised the significance and scale of the opportunity then in front of them. We initially helped with the bid documents. Following the award from Aberdeen City Council, we negotiated and finalised a promotion agreement based on a proposed forward funding solution for the core conference centre, with the Council funding the external hotel and energy centre. The complex interaction between various vested interests added to the intensity of the transaction. Negotiations and contracts changed shape as the Council re-evaluated its preferred structure, adding to complexities and requiring re-engagement with the owners of the land being acquired.
Why is this a good deal for all involved?
For Henry Boot, this very much puts them in the premier division for commercial development in Scotland. The incentivised profit arrangements are real drivers for our clients to now develop timeously and within budget.
For DLA Piper, we are delighted Henry Boot chose us as main legal advisers on such a significant UK development and, in fact, one of the largest development projects in Scotland in many years. Henry Boot needed to ensure they had the right commercially aware advisers and of course we were delighted to be entrusted with that appointment. For us, this is further validation that DLA Piper is the “go-to” firm for large scale complex property developments in Scotland, whether acting for developers, investors, or end users.
What challenges arose? How did you navigate them?
Inevitably, a deal such as this will always trigger multiple challenges. Through experience, a practical approach, and vast industry knowledge we worked hand in hand with our client to create optimum commercial solutions. Particular challenges included uncertain land rights and safeguarding the form of strip lease development and funding model required by Aberdeen City Council, before testing same in the investment market and adapting the model and documentation without need to return to the drawing board once the Council determined to self-fund.
