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Property Week -
‘Business as usual’ for 2,500 acre portfolio after sale falls through

By Jennifer Rigby

25th January 2008

National Grid is aiming to make a series of site sales and recruit a new property head in the wake of shelving the sale of its property arm.

Property Week revealed last week that ‘Project Birch’ – the sale of 2,500 acres of brownfield development land across the UK – had failed to attract acceptable bids.

A spokesman this week said the property arm was now considering options, including lining up potential individual site sales, joint ventures and the recruitment of a boss to take over from Phil Kirby, who is retiring.

It is thought to be putting up for sale one of its key assets – the only site not in DTZ’s original Project Birch sale – the Isle of Grain site in Kent, worth more than £100m.

‘Going forward, we will manage the portfolio to ensure we continue to generate the significant returns for the business National Grid has seen in the past,’ said Kirby.

‘We have leading skill sets in the remediation and sale of former gasworks, which we believe we can use to generate significant value from our sites in the UK and the US.’

The company maintained throughout that the sale – which would have been the largest property sale ever by a former public company – was not forced, and that it would only consider offloading its assets and 80- strong remediation expert team, at a reasonable price.

National Grid Property was put on the market in September with a guide price of £800m. But since the downturn, best and final bids from final bidders AIG and Telereal were thought to be nearer £500m.

It is believed that bids were so wildly different from National Grid’s expectations that it did not continue dialogue with them following their final submissions.

Both AIG and Telereal had big plans for the portfolio. AIG is thought to have planned a venture for Project Birch, probably through its development agreement with ex-St Modwen man Richard Froggatt’s London & Wharfedale.

Telereal had contacted interested parties to discuss splitting the property portfolio.

National Grid is also looking for a director. Kirby decided to retire this year – before any investigations into selling the company. He has now agreed to stay for a further six months until a successor is found.

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