The news that arguably the world’s best arena is up for sale would hardly have caused a ripple among the staff at London’s
But the fact that Meridian Delta Dome Ltd. (MDDL) has put a £35 million ($52 million) price tag on its investment is more of a story about how the credit crunch has crippled the property investment market. MDDL has a long-term lease on the government-owned land.
Quintain Estates & Development and Lend Lease, the joint-venture partners in MDDL, are both said to be going through sticky times.
In a bid to slash costs, Quintain cut more than a dozen head office jobs six months ago and announced it wouldn’t pay a dividend for up to two years.
In 2002 the company bought Wembley (London) Limited, owners of the land around the Wembley Stadium, and also entered the contract to develop the Greenwich Peninsula.
Lend Lease is one of many property investment companies reportedly seeking to raise cash by selling new shares. Lend Lease chief exec Greg Clarke told The Times that some of LL’s assets were up for sale.
Under the terms of MDDL’s agreement, if the Greenwich site is redeveloped, U.K. taxpayers are entitled to a share of the net profit.
Rather than threaten AEG’s position, potential investors – and the estate agents selling the site – are likely to recognise the American entertainment company will be a key player when it comes to attracting a new owner. The success of The O2, which was the world’s busiest venue in 2008 and won several industry awards, should help to attract some interest.
AEG has reportedly put more than £350 million ($520 million) into turning the empty dome into the venue it is today.
The business editorials suggest Savills and Michael Elliott, the agencies handling the sale, should be looking for a sovereign wealth fund, or what The Daily Telegraph described as “a high-net worth individual.”
The agencies are reportedly trying to close a deal by the end of March.