Retail Development

Concepts

• construction work
• shrewsbury
• sath
• retail development
• respect of a new retail
• administrative use development
• leases of the retail space
• noviniti dev co
• compass contract services
• telford hospital nhs trust

Location

Telford

Description

The Shrewsbury and Telford Hospital NHS Trust ("SATH") intends to enter into contractual arrangements with Noviniti Dev Co 1 Limited ("Noviniti") and Compass Contract Services (UK) Limited ("Compass") and Compass Group (UK and Ireland) Limited (as Guarantor) in respect of a new retail and administrative use development being constructed by SATH at the Princess Royal Hospital in Telford ("the Hospital") ("the Building") . The documents to be executed by SATH comprise a Principal Agreement for Underleases ("S2AFL") and a Licence for Alterations ("LTA") to be granted to Noviniti to permit Noviniti to undertake internal alterations and fit-out works pursuant to Noviniti's lease of the ground floor of the Building ("Noviniti Works"). The contractual arrangements are structured as a land transaction exempt from the Public Contracts Regulations 2015 (“PCR”) and the Concession Contracts Regulations 2016 (“CCR”).

Total Quantity or Scope

SATH intends to enter into the S2AFL with Noviniti, Compass and the Guarantor and the LTA with Noviniti. Under the S2AFL and the LTA, Noviniti has the right to undertake the Noviniti Works at the Building. Following completion of the Noviniti Works, Noviniti will grant leases of the retail space to Compass and a lease of the communal space to SATH. SATH will be obliged to accept leases of the retail space directly from Noviniti if Compass defaults. SATH has structured the contractual arrangements as a land transaction exempt from the Public Contracts Regulations 2015 and the Concession Contracts Regulations 2016.

Award Detail

Award Criteria

CPV Codes

• 45213100 - Construction work for commercial buildings

Legal Justification

The subject of this notice is the proposal by SATH to enter into the contractual arrangements contained in the S2AFL and the LTA. These arrangements follow-on from the Agreement for Lease dated 19 May 2023 entered into between SATH and Noviniti ("S1AFL") relating to the grant to Noviniti of a lease of the ground floor of the Building for a term of 33 years ("the Noviniti Lease"). Completion of that lease will take place following completion by SATH of the relevant parts of the building works being undertaken by SATH in the construction of the Building. The S1AFL was the subject of a VEAT Notice published by SATH on 6 April 2023.Under the terms of the S2AFL Noviniti is not obliged to undertake the Noviniti Works but if it fails to do so, SATH may terminate the Noviniti Lease. the Noviniti Lease contains a break right in favour of SATH in the event that Noviniti does not commence the Noviniti Works by an agreed deadline. It has a similar break right where Noviniti fails to complete the Noviniti Works by an agreed deadline. Where Noviniti completes the Noviniti Works then under the S2AFL it may call for Compass and the Guarantor to accept leases of the retail areas within the Building for a term of 15 years and for SATH to accept reversionary leases of those areas for a further term of 15 years. (There is also a provision for SATH to accept a lease of the communal areas of the Building at a peppercorn rent and to accept a sublease from Compass of one of the retail units at a peppercorn rent.) SATH considers that the arrangements fall within the land exemption under Regulation 10(1)(a) PCR and/or regulation 10(11)(a) CCR.Noviniti is under no obligation to serve notice to elect to carry out the Noviniti Works. No public works contract arises due to the lack of an enforceable obligation. Following completion of the Noviniti Lease Noviniti has the exclusive right to undertake the Noviniti Works for as long as the Noviniti Lease remains in operation and until such time as any of SATH break rights under the Noviniti Lease become capable of exercise.

Other Information

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