Developments, deals and determination: Shoosmiths shows its real estate expertise

2022 proved to be a turbulent year for the UK real estate industry. It ushered in a period of high inflation and interest rates - making funding and building developments challenging.

The long-term impact of the Covid-19 pandemic also posed further operational and financial difficulties for the residential and commercial property sectors.

The year saw major legal developments, with the Covid-19 commercial rent arbitration scheme ending in August, bringing the landlord and occupier relationship back into focus.

The Building Safety Act 2022 received Royal Assent in April, with developers urged to prepare for the Act’s provisions, which were introduced throughout the year and into 2023.

Despite the economic upheaval and legal changes, the industry remained resilient. Deals were done, developments completed, and the real estate market showed its ability to adapt.

Shoosmiths’ real estate team was at the heart of this activity, advising clients on legislation, but also problem-solving and helping bring residential and commercial projects forward.

Driving regeneration

2022 saw Shoosmiths’ real estate team, led by partner James Needham, assist Stoford with its successful appointment as preferred developer for the potential regeneration of a site in Birmingham to provide a new 84,001 sq ft facility for the BBC. This follows the BBC committing to relocate its current base in the city to the historic Typhoo Tea factory in Digbeth.

In North Yorkshire, real estate partner Patrick Duffy and legal director Emma Tonge, advised on the acquisition and funding of a 149-acre ex-colliery site at Konect, Kellingley. This followed the real estate duo joining Shoosmiths’ Manchester office from Addleshaw Goddard in September 2022, bringing a combined 50 years of legal experience to the firm.

Once one of Europe’s largest coal mines, Shoosmiths provided real estate, planning and environmental advice to HPREF I Konect Investments - a joint venture between Cole Waterhouse and Henderson Park - in relation to the project. The site is set to be regenerated to create a rail-connected manufacturing and logistics scheme.

National sales

2022 also saw Shoosmiths real estate act on several major portfolio sales.

In June, partners Edell Asquez and Simon Meek supported M3 Capital Partners on the sale of its portfolio company, Extra MSA Group, to a consortium of institutional investors.

Shoosmiths advised on the real estate aspects of the deal, providing property, construction and planning due diligence on a portfolio of motorway service areas and development sites.

The firm also advised Workspace on the sale of a medical centre in Newbury in May 2022.

The £7.25m deal saw the London-based provider of flexible offices sell the first non-core asset from the McKay Securities portfolio following its acquisition by Workspace Group, with Shoosmiths being retained to advise on all aspects of the deal, including real estate, construction and tax. Leading the deal team was principal associate Liz McKillop Paley and legal director James Benedick, supported by construction expert Andrew Outram.

In a landmark deal for the logistics sector in 2022, Shoosmiths also assisted Leftfield on the sale of 20 urban logistics assets across the UK totalling 1.3m square feet for £227.5m.

Leftfield’s sale to Kennedy Wilson was supported by partner Ellis Gardner-Browne who headed up the Shoosmiths deal team. Real estate experts from Shoosmiths Scotland also acted in respect of the Scottish assets that formed part of the portfolio, showing the cross-border approach taken by the law firm when supporting complex portfolio sales for clients.

Led out of its London office, Shoosmiths was also the main adviser to the UK Outlet Mall Fund on the sale of its Cheshire Oaks and Swindon McArthurGlen Designer Outlets.

The £600m deal completed in April and was the largest in the sector since 2014. London real estate head Joseph Mazzucca is the client partner, with partner Paul Alger leading on the significant disposals, alongside partner William Seymour and a multi-disciplinary team. 

Acquisitions

Shoosmiths also showcased its expertise, supporting major real estate acquisitions in 2022.

The firm supported Revolution Bars Group on its £16.5m acquisition of Peach Pub Company in October. Shoosmiths advised Revolution, which operates 69 bars across the UK, on the real estate aspects of the deal that saw it acquire Peach and its collection of 21 pubs.

“Shoosmiths’ expertise was a key component to the success of the deal,” said Danielle Davies, chief financial officer at Revolution Bars Group. “The firm’s responsive and tenacious approach helped guide us through the various real estate aspects of the acquisition and to achieve completion within the required timescales.”

Throughout the year Shoosmiths also supported Northwood Investors on the forward purchase of a 608,000 sq ft, five asset portfolio of last mile logistics developments. 

The portfolio acquisition, led by Shoosmiths real estate partner Deborah Gordon Brown, is enabling Northwood to continue expanding its logistics footprint, with Shoosmiths acting as retained advisers and providing guidance on pre-lets, lettings and management instructions.

Real estate experts from Shoosmiths’ Thames Valley office also advised fitness and health club operator, Third Space, on the acquisition of two new landmark locations.

Principal associate Chris George and senior associate Emma Foulds, supported by partner Nathan Rees, assisted Third Space on the deal, which saw it secure 70,000 sq ft of new health and fitness space across two sites in Wimbledon and Battersea – opening in 2023.

Growth areas

While 2022 did bring economic and political disruption, parts of the UK real estate market continued to expand and develop – proving to be countercyclical against a wider downturn.

Build to rent (BTR), in particular, showed it’s potential for long-term growth.

Of the £10bn of investment that was deployed in the UK’s living sector from Q1-Q3 last year, BTR accounted for almost half of the investment, with £4.9bn entering the market and showing its appeal to investors, even during periods of global volatility.

Experts from Shoosmiths’ living sector team advised on one of the year’s landmark deals between Aviva Investors and Packaged Living. This involved the forward purchase and development of 195 new energy-efficient homes in Shropshire.

Real estate partners Simon Meek and Judy Fawcett acted for Aviva Investors on the deal, which is the first investment it has made since forming its partnership with Packaged Living in 2021 and announcing plans to target an initial portfolio of approximately £200m.

In the purpose-built student accommodation (PBSA) sector, Shoosmiths advised AIB Group on its funding of the acquisition of a 999-bedroom PBSA development in Liverpool.

The £110m deal involved cross-team collaboration, with real estate partner Daniel Halstead, working alongside banking and finance partner Anna Vangrove and associate Michael Kelly.

In September, Shoosmiths also revealed its role in supporting Proximity Data Centres on a new acquisition in Milton Keynes, adding a tenth data centre to its expanding portfolio.

The deal took the total amount of space Shoosmiths has helped Proximity to acquire to over 300,000 sq ft, including sites in Birmingham, Liverpool and Chester.

Leading the expert team advising Proximity at Shoosmiths is real estate partner Liam Phillips, supported by Dan Stamford, Alistair Hammerton, Mandeep Vryaparj, Michelle Morgan, Richard Baker, David Adams and Imran Cousins.

Pre-eminent expertise

It wasn’t just deals that Shoosmiths’ real estate team focused on in 2022, however, with the firm’s experts also sharing best practice and bringing those in the property industry together.

The firm was part of a coalition behind plans to deliver a high street revival in the UK.

Working alongside retailers, local authorities, landlords, investors and community organisations, as well as the British Property Federation and Radix think tank, Shoosmiths helped shape a set of proposals seeking to drive positive change across urban centres.

The proposals spanned promoting stronger localised partnerships between social enterprises, councils and landlords, while also creating a High Street Buyout Fund and giving social enterprises support to identify new uses for empty high street buildings.

Following the September 2022 mini-budget and resulting economic turmoil, Shoosmiths also hosted a roundtable on the student accommodation market’s ability to overcome crises.

Bringing together funders, operators, developers and agents, as well as policy and legal experts, the discussion - held at the firm’s London studio - focused on the evolution of PBSA. Shoosmiths’ experts also shared the latest on the Building Safety Act 2022, biodiversity net gain requirements and how the PBSA sector is adapting to meet changing student needs.

Leading the way

Recognising its real estate team’s ability to guide clients through one of the most challenging operating periods on record, Shoosmiths was named Legal Team of the Year at the EG Awards 2022 where the judges highlighted the firm’s legal and commercial expertise.

The EG award followed Shoosmiths real estate also being crowned Legal/Professional Team of the Year at the Property Awards and Planning Law Firm of the Year at the Planning Awards, with the firm completing a hat-trick of industry accolades.

The 2022 Planning Law Survey also ranked the firm’s planning team in the top four practices in England, citing its specialism in ‘emerging areas such as biodiversity’.

On the achievements, Kirsten Hewson, partner and head of real estate at Shoosmiths, said:

“Shoosmiths real estate is leading the way when it comes to advising the property industry. Our team are working collaboratively across the UK, providing excellent service and helping clients deliver projects that are transforming the built environment and society for the better.

“Our experts are guiding clients through the rapidly evolving legislative and business environment, while developing innovative solutions to industry-wide challenges. I couldn’t be prouder of the team and the legacy they are building as the pre-eminent real estate law firm.”

Shoosmiths real estate is building on this success in 2023. Its team continues to work as long-term strategic partners with clients, having most recently acted on the £305m sale of 37 car parks located across the UK – the culmination of a decade-long involvement with the portfolio and showing its ability to manage complex and high-value matters.