Council pays £45 million for share of Chesterford Research Park
Uttlesford District Council has bought a 50 per cent share of leading life science hub Chesterford Research Park for £45 million and becomes joint owner with Aviva Investors.
With central government funding shrinking, the council is setting up a commercial investment vehicle to generate stable income. The research park deal kicks off that portfolio. The new partnership is expected to underpin future development of the park.
As one of the most prized commercial assets in the district, Chesterford Research Park offers both an immediate stable income stream as well as growth potential.
To fund the project, the council is using its own reserves along with a mix of loans from other local authorities, the government and private funders. The arrangement will generate an initial yield of 5.6 per cent per annum for the council rising to 6.3 per cent by year five.
The deal follows a lengthy process of due diligence by the internationally renowned commercial agent Cushman and Wakefield and the international law firm Hogan Lovells.
Dawn French, chief executive of Uttlesford District Council, said: “Chesterford Research Park is one of the premier commercial sites in Uttlesford and has excellent potential for further growth. We are delighted to be working with Aviva Investors on this initiative and look forward to playing a key role in the continued success of the park.
“Maintaining a financially sound and effective council is one of our priorities, and we are confident this investment will be of significant benefit for residents and businesses, as well as those with a specific interest in the park. It will go some way in helping us to bridge the funding gap which will, in turn, enable us to continue to deliver important services to our communities.”
Ed Casal, chief executive of global real estate at Aviva Investors, said day-to-day management of the park would continue unchanged and the existing park team remained committed to delivering an environment that will nurture and encourage the growth of current and future occupiers.
“This partnership allows us to look ahead to the next phase of development for Chesterford to ensure we consistently provide the buildings, facilities and services required by life science organisations at every stage of their development.”
Chesterford Research Park provides an environment for both established and early stage biotechnology and pharmaceutical R & D companies. Tenants include Arecor, AstraZeneca, Charles River Laboratories and Domainex.
Studded in 250 acres of parkland, Chesterford has a masterplan for around 900,000 sq ft; approximately 300,000 sq ft of laboratory and R & D space is already occupied.
The council’s interests at Chesterford will be represented and managed by Aspire (CRP) Ltd, a wholly owned subsidiary of Uttlesford District Council set up to manage this latest investment.
A newly formed board of representatives from Aviva Investors and Aspire will meet quarterly to report on current activity and future development plans. Aviva Investors will retain the asset management role at the park.