Summary
Selected as development managers following a competitive reporting and interview process, BHP assisted Nuveen with the preparation of a masterplan and feasibility report on the mixed use redevelopment of the entire site. The site was located next to the Royal Pier Waterfront regeneration scheme which was also at planning stage and next to the new Red Funnel terminal building.
The feasibility study showed that a redevelopment was not financially viable and together with Nuveen, the decision was made to to sell the asset rather than develop out in 2016.
Business Case
STRENGTHS
- Overlooks Marina
- Town centre position
- Short unexpired leases allow to plan for development with income
OPPORTUNITIES
- Substantial massing improvements
- Mixed use development with partial pre-let
WEAKNESSES
- Southampton office market depressed
- CAPEX required if continued office use is chosen strategy
- Adjacent to a Listed building
- Sits over major utility infrastructure
THREATS
- RPW development secures a pre-let
- Delays to Royal Pier development cause continued disturbance in vicinity of the subject site
- Build cost inflation