Balfour Beatty Announces Disposal of Two UK PPP Assets
Balfour Beatty, the international infrastructure group, has announced the disposal of its interests in two major UK Public-Private Partnership (PPP) projects for a total consideration of £97 million, generating total gains on disposal of £51 million.
The two projects are its 50 percent interest in the University Hospital of North Durham PPP project and its 100 percent interest in the Knowsley Building Schools for the Future (BSF) project.
The proceeds from these transactions exceed the Directors’ valuations by £44 million, representing an uplift of 82 percent.
These transactions are in line with Balfour Beatty’s strategy to recycle equity invested in its portfolio, and further demonstrate the quality of the investment portfolio and its ability to generate value for shareholders.
The proceeds will be used to invest in new and existing projects, in areas that align with the Group's target geographies and market sectors.
The sale of Knowsley for £42 million is unconditional and is expected to complete shortly. Balfour Beatty replaced 10 ageing secondary schools with seven new schools in partnership with Knowsley Council in a 25-year, £157m project.
The sale of Durham for £55 million remains subject to the right of the co-shareholder to exercise its rights of pre-emption at the proposed sale price, with completion expected to occur by mid-July.
The original Durham projects was a £90million contract for the design, build, finance and operation of the 566-bed University Hospital of Durham, which opened in 1998.
Both assets are being acquired by funds managed by Dalmore Capital Limited, with consideration to be paid in cash in full on completion of each transaction.
Balfour Beatty Executive Chairman, Steve Marshall, said: "These disposals are in line with our strategy to generate income from our Infrastructure Investments business through disposals, thereby releasing cash for future investments and delivering value for our shareholders.
“The transactions demonstrate the quality and liquidity of our portfolio, and show again a substantial premium to the Directors’ valuation.”
Skanska invests $225m in Houston office project
Skanska is investing US$225m in an office development project, 1550 on the Green in Houston, with construction expected to begin in June and scheduled to be completed in 2024.
The construction contract is worth US$125M, which will be included in the Q2 order bookings. International law firm Norton Rose Fulbright has signed a 15-year lease for about 30 percent of the building.
Located at 1550 Lamar Street, adjacent to Discovery Green, in downtown Houston, Skanska plans to develop and build a 28-floor, 34,800 square meter office tower.
1550 on the Green will be the first part of a three-block master plan by Skanska, which will transform the parcels into a distinguished district known as Discovery West and consist of 3.5 acres of mixed-use development full of restaurants, retail and lush green space. The project will target LEED and WiredScore Platinum certifications.
Since 2009, Skanska has invested a total of US$2.8 billion in commercial and multi-family projects, creating more than 1 million square meters of sustainable and community focused developments in select U.S. markets. Skanska USA had sales of SEK66 billion in 2020 with 7,600 employees in its operations.
Skanska’s flagship London office has set the standard in sustainable workspaces by becoming the first in the UK to achieve WELL Platinum under the new v2 pilot scheme.
The accreditation from the International WELL Building Institute (IWBI) was awarded through the v2 pilot, the newest version of the WELL Building Standard. It looks at all building features and management processes – from air and water quality to lighting, acoustics, nutrition, thermal comfort and mental wellbeing. It’s widely recognised as the industry yardstick for measuring how workspaces can contribute to the wellbeing of occupants.
The offices – which span three floors of the newly developed 51 Moorgate – contain floor-to-ceiling windows for extensive natural light, dedicated wellbeing and quiet spaces, as well as stringent air and water quality monitoring, among a range of other features that have helped earn the standard.
The company has also been exploring drone flights for use in industrial environments.
Peter Cater, Development Manager, said it was invited to carry out trials because of its use and knowledge of drone capability. "The trials have benefited everyone involved: sees.ai get to test their equipment and remote use of the drones and we get access to accurate, real-time data on our construction activities which benefits us and our customer, the Defence Infrastructure Organisation."
“Projects like this – at the forefront of innovation – go to show what an exciting industry construction is to be involved in. We are always looking for innovative ways of working, ways to be more sustainable so we can find better solutions for our customers. These trials are just one small part of our digital transformation journey.”