Public procurement notice: Voluntary Ex Ante Transparency Notice
Published: 2020-07-16
Buyer: Gravesham Borough Council
Country: UK
Contract type: Services
Procedure: Contract award without prior publication
CPV classification: 45211350 | 45212000: Construction work for leisure buildings | 45212400 | 45212411 | 45212420
Estimated value: 102500000 GBP

Technical requirements: The Council will enter an agreement with R Blue Regen GR Ltd (RBR) and Universities Superannuation Scheme Ltd (Landlord) to lease 1 Dreadsnought Street, Greenwich, London, SE10 0PU (the Property) for a term of 50 years for a total rent of GBP 102.5 million (indexed). Certain of RBR's obligations are guaranteed by Reef Estates Ltd. The Council will sub-lease the Property to Travelodge Hotels Ltd (Travelodge). At the expiry of the lease the Council has the option to acquire the freehold of the Property from the landlord for a nominal sum. The landlord and RBR will construct a new hotel building. These works are funded by the landlord and RBR to a specification agreed by them and set out in an existing agreement for lease with Travelodge. The Council is only legally obliged to lease of the Property on the completion of the new building.
The Council will enter one or more agreement(s) for lease with Travelodge, the Universities Superannuation Scheme Ltd (Landlord) and RBR for land at 1 Dreadsnought Street, Greenwich, London, SE10 0PU (the Property) and the Council will subsequently lease the Property from the landlord for a term of 50 years and for a total rent of GBP 102.5 million (indexed). At the expiry of the lease the Council has the option to acquire the freehold of the Property from the landlord for a nominal sum.
The landlord will appoint R Blue Regen GR Ltd (RBR) to develop a new hotel building under an agreement which the Council is not a party. These works will be funded by the landlord and developed by RBR to a specification agreed by the landlord and RBR which is also set out in an agreement for lease of the Property first made between a third party and Travelodge in 2019. The Council will benefit (as the landlord's tenant) from certain warranties and protections in relation to those responsible for the design and construction of the new building.
The structure of the legal agreements is that by entering into the agreement(s) for leases the Council will be obliged to accept a lease of the Property from the landlord and also to sublease the Property to Travelodge on the practical completion of the hotel building. Travelodge has through the 2019 agreement specified the hotels specification and RBR will have obligations to Travelodge to build the hotel to that specification. The landlord/RBR will have an obligation to the Council not to do anything which would cause the Council to be in breach of those agreement for Lease obligations which it owes to Travelodge.
The Council is only legally obliged to accept a lease the Property from the landlord on the practical completion of the new building.
The predominant purpose of the arrangements is a contract for the acquisition of a leasehold interest of the Property by the Council and the sub-letting of that Property by the Council both transactions are exempt from the Public Contract Regulations 2015 (Regulations) under Regulation 10(1)(a). Further the Council is neither requiring the landlord or Reef to undertake works nor is it specifying the works to be undertaken. To the extent that the construction of a new building would otherwise fall within those regulations, Regulation 32(2)(b) of PCR 2015, permitting a direct award without competition on the basis that the works can be supplied only by one supplier as a result of the landlord's exclusive property rights applies.


Winner: Universities Superannuation Scheme Ltd
Award value: 102500000