1
Qualifications and experience
1.1 My
name is Christopher Paterson. I am employed as a Fund Manager
by Morley Fund Management Limited (“Morley”), a UK institutional
asset management business which is owned by Aviva plc and I am
responsible for the Life Funds Shopping Centre and High Street
Shops portfolio with a value of approximately £2.4bn.
1.2 I have
24 years' experience of major occupational development schemes and
investment, on behalf of policy holders, including the acquisition
and development of shopping centres and high street retail
provision.
2
Introduction
2.1 CGNU
Life Assurance Limited ("CGNU") owns the long leasehold interest in
the Southgate Centre, Churchill House, the Bus Station and land at
Kingston Road, Bath.
2.2
Together with Commercial Union Life and Norwich Union Life, CGNU is
a wholly-owned subsidiary company of Aviva plc, the biggest
insurance group in the UK. Likewise, Morley is a wholly-owned
subsidiary company of Aviva and manages the property fund interests
of CGNU, Commercial Union Life and Norwich Union Life. Morley
is a leading institutional investor, with global assets under
management of £128 billion and manages in excess of £18bn of UK
property assets. Details of the corporate position as between
Aviva, CGNU and Morley are detailed in my evidence.
2.3 I
assumed full responsibility for the Southgate redevelopment scheme
("the Scheme") approximately three years ago and I have overseen
the applications for the Planning Consents for the Scheme and
negotiation of the Planning Agreement and I am currently
negotiating the final terms of the Building Agreement and
headlease.
2.4 As
part of the overall funding and development strategy for the
Scheme, the existing CGNU assets in Bath were contributed to a
Jersey Property Unit Trust ("the Trust"). The Trustees of the
Trust are BNP Paribas Jersey Trust Corporation Limited and Anley
Trustees Limited based in St. Helier. The Trust is managed by
Morley (Jersey Unit Trusts) Management Ltd and Morley is the
Investment Adviser and Property Manager to the Trust. 99.9%
of the issued units in the Trust are held directly by CGNU.
2.5
References to CGNU in my evidence include, where relevant,
references to: CGNU Life Assurance Limited; Morley Fund Management;
BNP Paribas Jersey Trust Corporation Limited and Anley Trustees
Limited as Trustees of the Southgate Property Unit Trust; and/or
Southgate Limited Partnership acting by its general partner
Southgate General Partner Limited.
3
Scope of evidence
3.1 My
evidence focuses on: the opportunity presented by the Scheme from
an investor’s perspective; CGNU’s brief to its design team in
formulating the design of the Scheme proposals; the consultation
undertaken by CGNU in developing the Scheme proposals; the
deliverability of the Scheme and funding.
4
Commercial justification for the Southgate scheme
4.1 My
evidence refers to the criteria that I believe a retail scheme of
the requisite scale and quality which can become part of the fabric
of Bath must have to be successful and I am confident that the
Scheme will meet these criteria.
4.2 I
refer to Bath’s insufficient provision in terms of its department
store representation and larger space units and the unattractive
nature of the existing Southgate Centre, including the existing Bus
Station and Ham Gardens car park. The Scheme will regenerate
the Southgate area and benefit Bath as a whole and provide a new
Transport Interchange and improvements to the Railway
Station. A new department store will anchor the Scheme and
will attract new retailers to Bath.
4.3
Commercially, Southgate is an ideal location for development and
the Scheme. The improvement in retail provision and other
facilities that the Scheme will bring about will benefit the city
as a whole.
4.4 The
brief to Morley's design team stressed the need for an innovative,
mixed-use development, achieving an outward-looking environment
with a sense of place, sympathetic to the vernacular of the city,
whilst providing space of a nature that satisfies the requirements
of modern retailers. Integration with the City Centre was
essential so as to improve pedestrian flows within and through the
site. Architectural style was required to reflect that of
historic Bath to ensure that the Scheme appears as an important and
integral part of the central area of Bath.
4.5 The
proposals were required to maximise the retail potential of the
area, providing a department store, a replacement store for Boots
and shops of the right size to accommodate key retailers that need
to be attracted to Bath. Leisure uses were to include a
cinema with supporting restaurants. Public transport
facilities were required to be improved and adequate car parking
spaces provided.
4.6
Extensive discussions took place with the Council and numerous
meetings were held with and presentations given to, interested
parties, public amenity groups and members of the public. A
number of applications for different scheme proposals were
submitted to the Council as a result, in order to refine and reduce
areas of concern.
4.7 The
Scheme has been designed as a series of buildings and streets to
reflect the surrounding form and architecture. Consideration
has been given to roof scape views from Beechen Cliff and attention
given to the detailed form of the various roof structures.
4.8 My
evidence describes how CGNU invests significant sums in
developments by providing funds. However, as CGNU is not a
developer, a developer manager will be brought in to deliver the
Scheme when the Building Agreement and headlease have been
completed.
4.9 The
developer manager will not be in a position to require any changes
to the Scheme and will be required to adhere to the development
programme and construct the development in phases in accordance
with a strict time-table, with completion due in February 2010.
4.10 The development
proposals are at an extremely advanced stage and much more so than
is often the case for similar schemes at the same stage. This
is primarily due to Bath’s designation as a World Heritage
Site.
4.11 A financial
appraisal of the Scheme has been carried out. CGNU are able
to fund the entire development internally and, therefore, all
necessary funding approvals are in place. Funding has been
allocated for the Scheme, which will proceed when the
pre-conditions in the Building Agreement have been met.
5
Conclusions
5.1 I
conclude that it is essential that the Scheme proceeds in order to
significantly improve the retail provision in the City Centre,
transforming the Southgate area into a thriving shopping
destination and thereby enhancing the city as a whole. CGNU
fully supports the Council in pursuing the Order, which is needed
to secure implementation of the Scheme in the required
timescale. CGNU has the experience, funding and commitment to
ensure that the scheme is delivered.
