ADD2317 LIEC (Excel London) Estate Review

The London International Exhibition Centre (known as ExCeL London) opened in 2000 and was extended in 2010. It is a major asset for the Royal Docks. It brings over 4m visitors a year, promotes the Royal Docks as a place for business and investment as well as being a committed partner in the regeneration of the area including the Royal Docks Enterprise Zone.

The Royal Docks Team (a joint initiative between the Mayor of London and the Mayor of Newham) work closely with the ExCeL management team on a series of project and initiatives. The LIEC estate forms a key gateway to the Royal Docks as it neighbours three DLR stations (Royal Victoria, Prince Regent and Custom House), the latter of which is on the Elizabeth Line. It is also where the current and future Royal Victoria Dock bridges land on the north side.

LIEC has a lease from 2001 which was agreed by the London Development Agency (LDA) and which was amended in 2008 when LIEC was acquired by the Abu Dhabi National Exhibitions Company (ADNEC). The lease created the LIEC estate which is most of the area to the north of Royal Victoria Dock and includes the main centre as well as various development plots which have been developed into residential, hotels and retail. The LDA lease (and variation) were inherited by GLA Land & Property Limited (GLAP) in 2010.

The lease provides GLAP with a share of turnover from LIEC each year and sets out a process for sharing value when other plots are redeveloped. The lease is however very complicated (and was made more so by the variation in 2008) despite the reality being relatively straight forward in property terms. The lease sets out future development plots based on an historic masterplan which is now no longer relevant, and the plots don’t allow for easy decision-making.

This is evidenced by the fact that GLAP and LIEC had to agree a separate arrangement for the most recent two development plot deals because of the complexity and vagueness of the varied lease. This was cumbersome, time consuming and involved extensive legal negotiation which ultimately delayed the construction of new homes. New agreements will be necessary to allow the residential development to include more affordable homes.

The proposal now is that the lease documentation be simplified to address these issues.

This ADD does not seek approval for any immediate change of the lease arrangements. It merely seeks approval for the principle of exploring this and for budget to commission legal and commercial advice, as necessary, to develop proposals for future consideration. It is likely that any future changes would require a Mayoral or Director Decision.

Legal advice is needed to review the opportunities for varying the document whilst ensuring that GLAP’s interests are retained. Commercial advice is needed to ensure that the assessment of value now, or the calculation formulas for future value, are appropriate and protect GLAP’s position. The legal advice will be sourced via TfL Legal and the commercial advice procured via the TfL Property Panel.

Where the development of the estate includes residential the land is considered to be private land for the purposes of affordable housing, so some of this funding will review the means to increase affordable housing through additional subsidy or adjusted land value.

The guiding principles of the process for GLAP are:

- To continue to support the success and growth of LIEC in attracting visitors, investment and business in the Royal Docks.

- To ensure that any future changes continue to allow GLAP to receive an appropriate share of value from the LIEC estate.

- To rationalise the lease terms to make its interpretation easier and clearer to support proper management of the terms of the lease and make future decision-making easier.

- To provide a clear route for any future development of the estate including the basis for sharing value between the parties.

Further decisions for the GLA may result from this work.

The public sector equality duty requires the identification and evaluation of the likely potential impacts, both positive and negative, of the decision on those with protected characteristics (age, disability, gender reassignment, pregnancy and maternity, race, gender, religion or belief, sexual orientation). This lease review is not expected to raise any issues which could result in any potential impacts on those with protected characteristics.

This decision seeks approval for expenditure of up to £50,000 for legal and commercial advice relating to an assessment of the options to simplify the lease held by GLAP with the London International Exhibition Centre.

The funding for the expenditure will come from the GLAP budget.