Completion of the transaction is expected to occur later in the summer, following demolition of the former New Covent Garden flower market that occupies the site. The £2bn redevelopment includes a residential tower and a new market.
St Modwen said that it expected its share of VSM's cash proceeds after costs and tax to be £190m. Of this, £70m will be held in a restricted development account to fund its share of future obligations in respect of completion of 500,000 sq ft of new purpose built market facilities and associated infrastructure (£140m in total for VSM).
Following the sale and over the course of the next 10 years, VSM will remain closely involved in the wider regeneration of the Nine Elms area through its development agreement with Covent Garden Market Authority, which will see it provide new market facilities for New Covent Garden Market.
As the joint venture progresses with the delivery of the new market, the remaining 10 acres of development land will be released in phases for future transformation into three distinct character areas; to be known as Nine Elms Gardens, Nine Elms Grove and Thessaly Road that will feature a vibrant mix of residential, commercial, retail and leisure uses.
VSM will have no involvement in the future development of the Nine Elms Square site itself, which will now be taken on by Wanda HK.
Mark Allan, chief executive of St Modwen Properties, said: “The sale of Nine Elms Square is an important milestone, which will realise the capital required to fund the construction of over 500,000 sq ft of new market facilities. It also crystallises a significant element of the value we have been able to create on this complex, inner London development site. Together with our joint venture partner, Vinci plc, we remain very much committed to the longer term regeneration of Nine Elms and are excited about the opportunities ahead.”