On major projects, Chelsfield tends to adopt a two-stage modified JCT contract with an element of competition to establish overhead and profit margins and preliminary costs. Some of the key issues it considers at this stage are the contractors' approach to the project, and their willingness to work in partnership to achieve the overall project objectives.
There are no formal partnering arrangements but the company's approach leads it to work with a small group of main contractors. The company will also establish close relationships with those subcontractors it feels are key to achieving the project's goals. On very large projects, Chelsfield takes a construction management procurement approach, whereas small schemes are often negotiated with a preferred supplier.
Current and future projects
Chelsfield operates primarily in the South-east and London as a property developer and investor. The majority of its assets are held in the retail sector (53%), and the remainder are held in commercial offices (29%), leisure (7%) and data centres (9%).
Investment at present is dominated by the group's properties at Merry Hill and Paddington Basin. At Merry Hill, Chelsfield is attempting to broaden its store locations: construction of about 4000 m2 for Next is nearing completion. At the group's Waterford Business Park (acquired in 1999), an application is about to be submitted for an additional 20,000 m2 of office and residential space. The group expects to commence construction this year.
Paddington Basin is one of the largest developments in London. Chelsfield is currently developing The Point and Waterside buildings, and the expectation is that handover for tenant fit-out will take place in early 2003. Looking to the future, a number of buildings are planned in Paddington, the largest of which is the Grand Union Building. This 30-storey complex will house 67,500 m2 of office space, 22,500 m2 of residential and 2000 m2 of retail space. Demolition work has already begun in anticipation of planning being secured. Construction will, however, be subject to pre-lettings being secured. Given the current state of the London office market, this may result in project delay.
Plans for 100,000 m2 of retail and leisure space in White City were given the go-ahead by the government in 2002. Chelsfield will invest £150m in transport links including a new Tube station on the Hammersmith and City line, a railway station on the West London line, and a bus station. The White City development has taken five years to clear planning hurdles, primarily because it will include 4500 parking spaces. This request has been secured in return for Chelsfield's promise to invest in local transport infrastructure.
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