Delancey to form consensual JV with LRC Group unlocking Royal Mint Court redevelopment

Delancey is set to announce the formation of a consensual joint venture partnership with LRC Group, ending a near one-year deadlock and triggering a major redevelopment at the iconic Royal Mint Court by Tower Bridge.

CoStar News can reveal that Delancey is expected to confirm the resolution as early as tomorrow after an agreement was signed between the two parties this afternoon. 

The impasse arose after LRC Group acquired a loan, secured by the leasehold of Royal Mint Court, in a competitive blind auction last May which included Delancey as an underbidder.

Delancey had been striving to capture the marriage value from uniting the two leases which would have provided overall control for any asset repositioning or refurbishment.

Delancey has long held ambitions to redevelop the former home of the Royal Mint, after acquiring the freehold interest from The Crown Estate for £51m in November 2009.

The consensual resolution is a pragmatic outcome for both parties, which otherwise could have effectively blocked each other, under the legal rights on the archaic lease.

Details of the planned redevelopment remain at an early stage, but the probability is for either a mix of hotels and offices, with the hotel in the Grade II-listed building, or entirely offices. Residential is all but ruled out, given restrictions on residential conversions imposed by Tower Hamlets.  

CoStar News reported last May that LRC Group paid £49.5m for the Royal Mint Court Loan, with fierce competition well above the £30m asking price.  

The outstanding whole loan balance was £83.5m while the senior loan, securitised in Barclays Capital’s Equinox Eclipse 2006-1 CMBS, was £69.5m.

The majority of the 466,000 sq ft of office and ancillary accommodation is now vacant. 

The joint venture between Delancey and LRC will enable this to happen with Delancey appointed to secure planning consent for a scheme over the next 12 months.

In a statement released after CoStar News’ story, Delancey said: “Although an office scheme is an obvious possibility given the strength of the eastern fringe office market in London, all options remain open at this time.  The unusual nature of the property; being four buildings arranged around a green on a large 5.5 acre site means it could have a wide appeal to a variety of occupiers.” 

All parties declined to comment.

About CoStar News

Finance Editor, CoStar News
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