The restructuring represents a strengthening of both parties’ commitment to their partnership, combining expertise in private and affordable housing.
Barratt and L&Q first partnered in 2010 for the development of Altitude, a 27-storey residential tower in Aldgate on the edge of the City of London. Since then, they have jointly acquired developments at Queensland Terrace in Islington and Fulham Riverside on the river in Fulham, and contracted on a site at Nine Elms, part of the major redevelopment of the area in Vauxhall. Together these sites will deliver a total of 1,700 units, with a gross development value of £1.2bn.
Barratt said that the partnership had enabled it “to optimise development opportunities across London whilst retaining a diversified portfolio and managing development specific investment levels”.
The new JV parent entity is BDWZest Developments. The three existing JV trading entities at Altitude, Queensland Terrace and Fulham Riverside have been transferred into BDWZest. Barratt's share of the gross asset value of the three existing JV entities as at 30 June 2013 was £119m.
A new five year revolving credit facility of £120m has been arranged for BDWZest. This facility will initially repay a loan of £21m from L&Q that was made to the Altitude development in 2011. It will then be available to the JV for land and build expenditure. The JV will continue to be primarily equity funded by Barratt and L&Q.
Barratt Developments group chief executive Mark Clare said: "L&Q has proved to be a strong commercial partner and by working together we have been able to broaden our operations in the London market. This new alliance reinforces that position and gives us even greater financial capacity to seek out and secure large scale and complex opportunities."
L&Q chief executive David Montague said: "Our partnership with Barratt has enabled us to increase our delivery of much-needed high quality homes in landmark sites across London. This next step in our relationship will enable both of us to build on what has been a hugely successful start."