Infrastructure, mining and commodities
Technology and innovation
Life sciences and healthcare
Norton Rose Fulbright
Norton Rose Fulbright is a global legal practice. We provide the world’s pre-eminent corporations
and financial institutions with a full business law service. We have more than 3800 lawyers based
in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa,
the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial
institutions; energy; infrastructure, mining and commodities; transport; technology and
innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity
and integrity. We aim to provide the highest possible standard of legal service in each
of our offices and to maintain that level of quality at every point of contact.
“Norton Rose not only does law well but also understands clients’ wider ambitions and strategy.”
Legal 500 UK, 2013, Real Estate
“Norton Rose offer clients a comprehensive real estate practice, and the team can draw upon a
considerable international network. Clients appreciate the firm’s strong client-service ethic: ‘We
always entrusted urgent and intricate matters to Norton Rose knowing that the job would get well
done, and on time.’”
Chambers UK, 2013, Real Estate
Rankings, awards and accolades included in this publication pre-date the combination of Norton Rose and
Fulbright and Jaworski LLP on June 3, 2013.
Dar es Salaam
Rio de Janeiro
02 Norton Rose Fulbright
Our regeneration practice
Regeneration schemes are part of the continuing cycle of development and renewal of derelict
sites, rundown housing and former centres of industry and commerce. They bring vacant land or
buildings back into use for the benefit of the community.
A key feature of regeneration projects – and their principal challenge – is the achievement of a
successfully rebuilt community, or a successfully redeveloped centre of business and trade.
Regeneration often involves the wholesale co-ordinated redevelopment of a large part of a town
or city. It is not simply developing housing or retail space; it involves creating an integrated plan
which will meet the employment, entertainment, mobility and lifestyle needs of the community.
The principles of good urban design, the requirements of local planning authorities, the needs
of the community and the commercial aspirations of scheme stakeholders must all be brought
together and balanced.
Alternatively, a regeneration scheme may take an area of land which was previously used for
traditional heavy industry, for instance, and regenerate it in line with modern and economically
viable requirements, such as light industry or logistics. Here, issues associated with environmental
remediation are often key.
The drivers for any regeneration scheme will centre on a core set of common principles,
requirements and objectives, which will reflect and straddle national, regional and local needs.
However, whereas the location of any given regeneration project will typically be concentrated on
one, albeit large, area of land, the skills required to advise on all the various issues involve very
diverse product areas. For example, a single regeneration project may require legal advice on areas
• integrated transport, whether applying to roads, rail, ports or airport links;
• housing, including the mix of private and public housing types;
• technology, as witnessed by the increasing use of congestion charging for managing traffic in
city centres; and
• large scale commercial property development.
Global expertise – used locally
The legal skills required to assist those engaged in urban regeneration projects are varied and
rarely found in adequate depth in any one legal practice. Norton Rose Fulbright is, however,
an exception in that our lawyers have a pool of relevant skills and experience globally which
can be drawn upon for urbanisation or regeneration projects anywhere in the world. Our
experience includes construction contracts, financing, transport supply agreements, ticketing
and maintenance agreements, traffic management and control technologies together with local
and public authority regulations and procurement requirements. The skills involved are therefore
highly portable across our global practice.
From a property-specific perspective, we have particular skills in development and acquisition
agreements, planning, rights of light issues, compulsory purchase, highways and infrastructure,
environmental impact (including the legal regimes governing the protection of habitats and
species) and housing development including social housing projects. Handling large regeneration
schemes therefore requires diverse skills and significant, in depth, and specialised resources.
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Regeneration: The core elements
Developing ports and their surrounding areas is a key link in the transport flow to, and around,
city centres. Port development and privatisation is a fundamental aspect of our practice. We are
advising DP World in relation to the development of London Gateway, a major new container port
and associated Logistics Park on the Thames Estuary.
City centre development schemes
Mixed-use developments provide positive benefits to the town centre. We advised on the Westfield
White City retail centre development in West London.
Station and depot development
Some financing techniques for developing stations and depots are more appropriate than others.
We are actively involved in discussions between key industry players in the UK.
Providing a mix of housing types, including affordable housing, is increasingly important in cities
worldwide. We have been involved in many housing developments internationally and in the UK,
including advising on the largest residential development in the City of London for over 30 years
The use of congestion charging is a trend set to continue as a technique for managing traffic congestion
in city centres. We advised Capita Group on the GBP230 million outsourcing of the administration,
technology build and integration of the Transport for London congestion charging scheme.
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Metro / light rail
The development of metro or light rail schemes is a crucial aspect of city centre transport systems. We
have advised on metro and light rail schemes in cities in Europe, Canada and Asia.
Integrating transport planning and land / city centre planning is essential for long-term success.
We have a long history of working with clients in the rail sector and have been legal adviser to the
UK rail regulator, the ORR, since 2002.
Achieving quick and easy access to airports from city centres is vital if cities are to remain attractive
to visitors. The airport rail links we have advised on include the Gautrain Rapid Transport Project
(built for the Soccer World Cup 2010 in South Africa).
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UK Regeneration: Current Questions
The number of regeneration schemes, their scale and, in particular, the breadth of the issues they
give rise to have all grown materially in recent years. Whole tracts of urban land and specific
localities in London and the rest of the UK have been regenerated or earmarked for redevelopment.
At the same time, the parties who have become involved in the execution of these projects now include
some of the world’s largest real estate developers and investors. Such parties naturally need their legal
advisers to be able to address the complete spectrum of issues and product specialisations involved.
It is our size and subject reach and flexible way of working which enable us to fulfil these requirements.
We review the key product areas and related issues below.
Managing the planning stage
Ongoing planning reforms in the UK have made an already convoluted system more difficult to
navigate. The emphasis is on regional and integrated planning, with a top-down approach to
policy-making and regulation. Public enquiries or judicial reviews can last for several months,
causing further delays. The decision-making process contained within the regeneration of large,
complex areas is, in our experience, always elaborate and often fragmented.
One planning issue which is of key current importance to regeneration projects is the Community
Infrastructure Levy (CIL). This is a charge that local authorities in England and Wales can apply to
developments in their area. The proceeds go towards investment in local infrastructure.
The principle underlying the CIL is that developments require supporting infrastructure and it is
appropriate for developers to bear some of the cost. This used to be one of the functions of section
106 agreements which were criticised for, amongst other things, a lack of transparency in respect of how
proceeds were invested. The CIL applies to developments consented on or after the date upon which
a charging schedule is adopted in a particular area.
Creating new developments
A solid partnering framework is key to sustainable regeneration schemes. The main document
governing the commercial relationship between the key parties, being a developer and the
landowner, plus often other parties such as a local authority, the community, and funder, is the
development agreement. This agreement maps the way the scheme must be created and delivered.
The participation of all parties, the balancing of civic, housing and commercial components, and
the integration of a stakeholder approach, are all issues to be addressed.
The development agreement often dictates how land is assembled through a vacant possession
strategy. The developer is encouraged to gain satisfactory planning permission, offer comfort on
environmental care, provide a CPO indemnity and satisfy itself as to the profit level generated and
funding costs incurred.
Permission for the development of land under a lease or licence structure is then given. The
development agreement defines processes for works to be carried out, including allowances for
testing and substitution of building materials. The developer must meet specific milestones and
timetables, or face penalties associated with defaults.
The development, design quality and need to create focal points are also addressed by the
agreement. These must also be within the context of affordable housing and balanced against
standards such as those set by the Code for Sustainable Homes and BREEAM.
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The development agreement explains how scheme stakeholders approve practical completion,
address defects and assess ongoing developer / contractor liability.
If a local authority is involved in the regeneration scheme, the structuring of landholdings is of
fundamental importance as is the delivery of a capital and/or receipt via a leasehold or freehold
structure, so allowing a local authority to participate in the scheme’s commercial success. The
delivery of social and economic benefits will be of equal importance.
New forms of structuring
Increasingly alternative structures are being used to progress regeneration projects in a timely
fashion. The market remains challenging, with a ‘funding gap’ caused by depressed levels of
traditional bank lending (particularly for larger schemes).
More often, developers have had to look beyond the debt markets. Equity has filled some of the
gap, with higher levels of investment from overseas. In addition, developers have made greater use
of joint ventures. In pooling resources, developers can provide the higher levels of equity required
to fund developments, sharing the equity upside but reducing their exposure to risk.
In the UK, levels of forward funding are increasing. This involves the sale of a bare site to a purchaser
who will provide the developer with funding to finance the development of the site. An advantage
of this approach is that the SDLT liability relates to the value of the bare site, rather than the
Any regeneration programme, whatever its location, needs to be tax-efficient, and the way it is
structured is critical to that process. This involves designing the investment and gearing framework
to minimise tax leakage, using real estate investment trusts (REITs), property unit trusts or limited
liability partnerships. It also involves making sure that all capital allowances can be accessed, as
well as mitigating stamp duty land tax and conducting thorough VAT planning.
Setting environmental priorities
In regeneration projects, it is important to strike a balance between environmental and economic
priorities. If economic and environmental priorities collide the result is often cost, confusion and delay.
The potential for collision between environmental and regeneration interests is even greater in the
face of rigorous EU-led controls which govern site clearance, decontamination and the protection
of habitats and species. Together with the growing influence of vocal, well-organised local interest
groups, it is now more difficult to clear regulatory hurdles.
Building design and construction generally is a high-risk sector in terms of liabilities. This is
compounded when older structures are demolished by the added risk of historical contaminants
such as asbestos, lead or mercury - substances which are now subject to strict regulatory regimes
and need to be controlled and remediated carefully.
Integrating transport and infrastructure
Transport is a vital element of many regeneration schemes. Integrating all transport modes and
enabling goods and people to move freely are essential requirements for lasting regeneration.
Transport options should therefore be factored in early in the planning stage during the scoping
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The legal activity behind the delivery of each stage of a transport system requires specialist legal
skills and knowledge. Every aspect of the system has to be tendered competitively through an
appropriate procurement process. The assets and the infrastructure forming the hardware of the
system need to be acquired and built. Franchised operators of any part of the public elements of
the system need some regulatory control over their performance, particularly if they are responsible
for maintenance of the system. In operation, the flow of traffic needs to be controlled by effective
traffic management systems, such as congestion charging. The contracts for the traffic management
system must deliver a regime which ensures the supply of the correct and accurate software.
Getting the construction right
Well negotiated construction documentation can be critical to the delivery of regeneration schemes
on time, on budget and to specification.
There are various approaches to managing time-related risk just as there are a variety of contract
structures that ensure appropriate safeguards are in place. A liquidated damages regime, an
incentive mechanism (which encourages co-operation not obstruction) and an early intervention
system with escalating remedial programmes all contribute. There are also structures for
construction risk that provide for integrated responsibility within a consortium.
Private sector financing can be vital. Public / private sector partnerships can free up the investment
and skills required for large-scale regeneration projects. The long-term aspect of these partnerships
means that whole-life asset maintenance and efficiency of use of the asset plays a significant part
in ensuring value for money for the public sector.
Financing covers a host of issues such as the funding arrangements, the use and availability of
grants, the project finance documentation and any legal safeguards or structures needed for future
financing (such as a refinancing or change in equity ownership).
Disputes are a common risk in any construction contract. Potential damage is mitigated where
there is a system in place that resolves the dispute quickly and efficiently without delaying the
A redeveloped community has various needs which will contribute to its future success and
cohesiveness. Education, retail and leisure provisions need to be carefully designed within the
parameters of all applicable legislation. The role of the local authority in affordable housing
schemes needs to be carefully managed and we have extensive experience of negotiation with local
authorities and other public bodies.
A diverse community will have many different types of occupant and we have dealt with a wide
range of residential schemes, ranging from affordable housing and student accommodation to
luxury apartment projects and hotels.
One of the cornerstones of the UK Government’s carbon reduction policy is the requirement for all
new buildings to be “zero carbon” (meaning zero net emissions of carbon dioxide from all energy
use over the course of a year) by 2016 (in the case of new homes) and 2019 (in the case of nonresidential
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The objective of zero-carbon development also represents design challenges to ensure fabric
efficiency (to reduce the demand for carbon) and meeting energy demand with a low carbon
solution. It also represents legal challenges. Local authorities already account for the zero carbon
requirement in their planning regulations. The developer will also need to consider the
relationship between the requirements of planning and those of building regulations (changes to
Part L of the Building Regulations have recently been finalised).
Our recent Regeneration experience
We have an extensive regeneration track record. Below is a selection of recent major regeneration
transactions in the UK which we have advised on.
Advising Australian bank Macquarie Capital Group Limited in relation to their involvement in the
£2.5 billion Silvertown Quays development in London’s Royal Docks. This major mixed use
regeneration scheme is to be developed by The Silvertown Partnership and will include business
and leisure space as well as 1500 new homes on a brownfield site.
London Gateway, London
Advising DP World on the £1.5 billion development, assembly and establishment of London Gateway,
a 1500 acre site and the UK’s largest container port, including 800 acres of high class logistics park,
the largest in Europe. Advising on logistics, as well as lettings, port matters, planning, and environmental
aspects of the project. This project is located on the former Shellhaven Oil Refinery site, and so the work
has involved a number of complex land remediation issues which are common to many brownfield
Battersea Power Station, London
Advising a joint venture, comprised of SP Setia Berhad, Sime Darby Berhad and the Employees
Provident Fund of Malaysia, on the £400 million purchase of Battersea Power Station in London.
The landmark 39 acre site is being redeveloped to provide 3,700 homes and other commercial and
retail facilities, as part of the long-awaited regeneration of this post-industrial site. This was named
deal of the year at the Property Awards 2013.
The Shard, London
Advising Qatari Diar in relation to the financing of the Shard skyscraper in London which, at 72
storeys, is the tallest building in Europe. The Shard contains premium office space, a hotel, luxury
residences, retail space, restaurants, a five-story public viewing gallery and a spa, and is key to the
regeneration of the London Bridge Quarter in London.
Westfield White City, London
Advising Commerz Real Investmentgesellschaft mbH, the German investment fund, on its £1.5
billion investment in the White City retail centre in the UK. The centre houses over one million square
feet of retail space, plus associated leisure space. The project also involved the redevelopment of
local transport infrastructure, including the relocation of a London Underground tube station.
The Embankment, Manchester
Advising Ask Real Estate on a joint venture with Tristan Capital Partners to bring forward the £75
million first phase of a seven phase development framework agreement with Network Rail for the
redevelopment of the former Exchange Station in Manchester. The £525 million development is
the centrepiece of the plans to regenerate the Salford-Manchester boundary and will comprise
more than three million square feet across five phases for office, retail, residential and leisure use.
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The Embankment, Manchester
10 Norton Rose Fulbright
Our key real estate contacts are listed below. They can also refer you to our experts in other related
specialist areas such as transport, financing and sustainable energy.
Partner, Real Estate
Norton Rose Fulbright LLP
Tel +44 20 7444 3743
Partner, Real Estate
Norton Rose Fulbright LLP
Tel +44 20 7444 2764
Partner, Real Estate
Norton Rose Fulbright LLP
Tel +44 20 7444 3731
Partner, Real Estate
Norton Rose Fulbright LLP
Tel +44 20 7444 2358
Norton Rose Fulbright LLP
Tel +44 20 7444 2077
Partner, Environment, safety and planning
Norton Rose Fulbright LLP
Tel +44 20 7444 3251
Norton Rose Fulbright 11
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If you require any advice or further information, please speak to your usual contact at Norton Rose Fulbright.
Norton Rose Fulbright
Norton Rose Fulbright is a global legal practice. We provide the world’s pre-eminent corporations and financial institutions with a full business
law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia,
Africa, the Middle East and Central Asia.
Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and
commodities; transport; technology and innovation; and life sciences and healthcare.
Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest
possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.
Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated
as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members (‘the Norton Rose Fulbright members’) of
Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members
but does not itself provide legal services to clients.
© Norton Rose Fulbright LLP NRF19441 08/14 (UK) Extracts may be copied provided their source is acknowledged.