James Adams, a principal associate in the commercial property team together with Cherry Elliott, Head of Property acted for a rural Derbyshire estate in connection with the grant of a promotion agreement to a large UK property developer and investment company specialising in the residential, commercial and industrial sectors.
The estate lets residential properties and commercial business units and manages a mix of historic and modern housing, livestock and arable farms, other commercial enterprises, woods and walled gardens including a hall in the separate ownership of the National Trust.
The estate has entered into an agreement with a developer for the promotion of just shy of 30 acres of land with the intention being that the developer will seek planning permission for a commercial development scheme at the site.
The agreement is slightly unusual in that it is effectively a hybrid promotion agreement and call option so that the developer also has the ability the call on the estate to sell the land to it if it decides to draw down the land for its own benefit after securing planning permission.
Now that the promotion agreement has been exchanged, the developer will seek to agree a planning strategy for promoting the land with the estate. if planning is obtained and the developer chooses not to draw down the land for its own benefit, then the parties will agree on a marketing strategy with a view to securing the eventual sale of the land.
The work undertaken by the Higgs team included:
- Review and negotiation of an exclusivity agreement;
- Review and negotiation of a promotion agreement; and
- Liaising with the developer’s solicitors to satisfy property due diligence enquiries.
A number of contentious points came up during the negotiation of the promotion agreement which, at times, led to the negotiations becoming quite protracted and difficult. In particular this concerned price mechanisms and the treatment of proceeds in the event of a sale and also the estates ability to deal with other neighbouring land within its ownership suitable for development.
The Higgs team were able to navigate these issues with prudent advice to the estate (in liaison with the estate’s land agent) and the parties were delighted to finally exchange the promotion agreement in the summer of 2023. James is really hopeful that the site comes to fruition as this would represent a significant income for the estate and he looks forward to hopefully working with them in connection with the sale and other projects.
