Case Study - Home Office

In 2002, the U.K. government’s Home Office and Prison Service departments were occupying various buildings in London and required a new central office building to house up to 3,450 staff.
In March of that year, the Infrastructure Development business invested into Annes Gate Property plc, the winning consortium responsible for the development and operation of a new London headquarters building for both departments.

The project involved the demolition of the existing offices on a 4.3-acre site, followed by the construction of a building comprising three purpose-built interconnecting office blocks of c.76,000m². The balance of the site development included residential, retail and public space in compliance with local council requirements for a mixed-use development that would represent an urban regeneration success story.

This project structure exposed the builder and the operator to significant financial penalties for under-performance thereby mitigating key risks to the project’s return.

Specific challenges managed and overcome by the team and the consortium partners included:

• demolition works were space-constrained and complicated, requiring highly specialised equipment, which was imported from Japan; and

• the density of the surrounding urban area and the stringent security requirements made project and construction management complex, including exceptionally comprehensive insurance negotiations.

In January 2005 the building was completed on time and on budget, and the Home Office and Prison Service departments began occupying their new headquarters. The investment was realised in March 2006 through a portfolio sale to HICL Infrastructure Company Limited, which now owns 100% of the equity.