Caddick Magnus

We were approached by Caddick Developments Ltd, a developer based in Yorkshire, with regard to a development opportunity which had been introduced to them. This consisted of an existing office building of approximately 25,000 sq ft located in Sharston, South Manchester, formerly occupied by the Medical Defence Union .The building needed a full refurbishment and came with a site of approximately 1.5 acres which had consent for a further 25,000 sq ft of B1 space. They needed a local partner with the correct expertise and we were recommended by Lambert Smith Hampton as someone they could trust and who could also provide some equity as well as using our local contacts to organise the property finance.

We formed a 50:50 joint venture vehicle - Caddick Magnus Ltd - which was funded by the Royal Bank of Scotland.

We undertook a major internal refurbishment of the existing office building, including the provision of a new air conditioning system, and subsequently sold the building in its entirety to Covenant Health Care not long after practical completion. We also reconfigured the planning permission on the site twice - once to improve the existing office building and its position on the site which had been poorly designed originally; and secondly to procure a residential consent for an apartment building since at that time residential land values were beginning to outstrip those for B1. We considered whether we should develop the apartment building ourselves but decided against it since whilst we had the construction and project management expertise, we lacked confidence in market conditions which after detailed analysis weren't quite as robust as we were being advised. We therefore sold the site to Bellway Homes with a clawback provision within the contract should they improve the planning position further, which they subsequently did.

We were able to return the senior debt to the RBS within 2 years and both parties made a satisfactory return on the equity employed on the scheme.

The working relationship between the two companies was excellent and we have tried to work together since on a number of occasions but the correct opportunities have not arisen.