Media City

CHALLENGE

Land Securities initially engaged Savills Capital Advisors (SCA) in 2020 to assist in identifying potential acquisition targets to support their strategic growth objectives. As part of this process, SCA identified an off-market opportunity to acquire a 75% interest in MediaCityUK, a leading international hub for the creative and digitial sectors comprising 1.48m built sq.ft., with a further 1.6m sq.ft. pipeline.

The existing joint venture partners recognised Land Securities as being a strong strategic fit and therefore agreed to allow them to come forward before the launch of a formal disposal process in H2 2021. The challenge was therefore to provide a full financial underwrite as quickly as possible, to allow Land Securities to submit a formal offer and secure a period of exclusivity in advance of H2 2021.

SOLUTION

SCA provided the following advisory services:

Stage One: Macro and micro level economic and market data, and preliminary viability assessment

• Worked with Savills Research to produce various market research deliverables;
• Undertook a comprehensive review of the preliminary information provided, with a gap analysis to identifiy additional information required to complete the preliminary viability assessment in a timely manner;
• Identified key value drivers and risk areas relating to the built estate, including significant lease events and capex requirements;
• Worked with Land Securities to develop a preliminary business plan for the built estate and the 1.6m sq.ft. pipeline. This included leading workshops with the MediaCityUK management teams;
• Provided an indicative opinion on pricing, supported by a bespoke financial model;
• Provided assistance with all other market and CDD queries in support of the Stage One investment committee paper.

Stage Two: Detailed underwriting and transaction execution

• Made an off-market approach to the Vendor and completed a comprehensive review of stage two due diligence materials;
• Provided a final opinion on pricing, supported by an updated financial model;
• Provided input into key transaction documentation alongside tax, financial and legal advisors; and
• End-to-end management of the transaction to ensure a successful financial close.

RESULTS

• SCA’s deep market knowledge allowed us to identify this off-market opportunity and, together with a thorough financial underwrite delivered to a tight deadline, we were able to pre-empt a wider marketing process and secure best value for our client Land Securities.