Planning Due Diligence Case Study - Molson Coors Brewing Company Limited

Challenge

Vail Williams was appointed by longstanding client, global brewing company Molson Coors, to advise on the disposal of one of their town centre breweries in Alton, Hampshire.

Our client wished to maximise the site’s value, so we worked with them to deliver a disposal strategy that would achieve their objectives.

The Local Planning Authority, East Hampshire District Council (EHDC), wanted an element of employment use to remain on the site, so we undertook a commercial marketing exercise which demonstrated low employment demand.

How we helped

• Worked closely with EHDC to input into a development brief for the site involving the commissioning of various technical reports
• Undertook pre-marketing due diligence to establish environmental and flood risk implications, demolition costs, a process for terminating a telecommunications mast licence, obtaining an environmental permit surrender, and closure/sale of on-site and off-site licenced bore holes
• Key to the success of this transaction was the remodelling of the flood zone, which was subsequently agreed by the Environment Agency, enabling a full planning application to be submitted
• Secured a change in the Environment Agency’s flood risk map which took time, but was achieved with the remodelling of the flood zone secured
• This allowed more land to be used for residential/care home use, whilst limiting employment land to 0.4ha
• The site was widely marketed with interest for a range of uses and some offers conditional on planning. This exercise identified hotel and care home demand, the latter generating the better value
• Marketing of the site for residential development commenced based on the EHDC agreed development brief to house builders, mixed use developers and promoters, seeking unconditional and conditional offers
• We analysed multiple offers, including assumed s.106/CIL planning payment implications, and ensured compliance with the development brief
• Working with the client, we shortlisted offers and undertook best bid interviews, cumulating with terms being agreed with Cala Homes.
• Worked with the client to finalise detailed Heads of Terms and contract negotiation covering aspects such as overage payments, through to exchange of contracts

Results

• The strategic approach to planning and the subsequent land sale, enabled us to create greater land value
• The deal pivoted on the remodelling of the flood zone which created more land use and enabled planning application
• The result was the sale of the site to Cala Homes at a combined price approaching £20 million – significantly above its previous employment use value
• The site was sold on a subject to planning basis for 175 dwellings.
• The transaction also involved a separate sale of a care home/assisted living site of two acres which at the time of writing, was under offer.

Images ©️ Cala Group.