Legal Business

Legal Business Awards 2020 – Real Estate Team of the Year

Legal Business Awards 2020 – Real Estate Team of the Year

After much back-and-forth between the judges in a keenly contested category, we are now delighted to reveal the winner of Real Estate Team of the Year for the 2020 Legal Business Awards.

For this award, judges looked for a standout example of real estate-related work, including financing, development or construction, or cases and transactions in planning, environment and regeneration.

 


 

 


Sponsored by

Edwards Gibson

Winners – Addleshaw Goddard/Linklaters/Norton Rose Fulbright

These three firms collaborated to advise the joint venture between Permodalan Nasional Berhad and the Employees Provident Fund on its £1.58bn acquisition of the commercial assets within Phase 2 of the Battersea redevelopment project.

Once redeveloped, the iconic art deco power station building will house Apple’s new European HQ and a private members’ club, a 2,000 capacity events venue and over 250 residential homes along with luxury retail, food and beverage and leisure accommodation.

The deal focuses on one of London’s largest, most hotly-anticipated regeneration sites. Over the years, the site has been subject to a number of unsuccessful redevelopment attempts due to the significant challenges posed by the site – so much so that it has been described as being the ‘Everest of real estate’ on the basis that it is considered to be one of the toughest redevelopment projects in the world, with a number of developers having tried and failed to conquer it.

The transaction is anticipated to comprise one of the UK’s largest-ever single-asset real estate transactions. Linklaters, led by Patrick Plant, advised the joint venture purchaser; the seller (the owners of Battersea Power Station Development Company) was advised by an Addleshaw Goddard team headed by Leona Ahmed; with Norton Rose Fulbright (Dan Wagerfield and Dan Kennedy) acting for the seller on the financing aspects.

No individual firm stood out as contributing to the overall success of this deal: there were a number of different and complex parallel workstreams, which demanded fluid co-ordination between all three firms.

This truly collaborative process meant this entry stood apart. Christopher Gilchrist Fisher, senior director of CBRE Global Investors, said: ‘Without the co-operation and shared objectives of all involved, this transaction would not have happened. Deals of this level of complexity involve managing the multi-layered requirements of various stakeholders. They demand a new type of lawyer – one who works with their respective clients for the future success of the project, above individual requirements, and in the face of short-term gains.’

Highly commended – CMS

Acting for longstanding client Vita on its landmark £600m portfolio sale of Vita Student assets to DWS’s real estate funds. The portfolio comprises a total of 3,198 beds in Manchester, Glasgow, Edinburgh, Leeds, Birmingham and Newcastle.

CMS fielded a multi-disciplinary team, led by partners Gareth Saynor and Peter Winnard, comprising over 35 advisers in Sheffield, Manchester, London and Edinburgh, to deliver this deal for Vita. This was a complex transaction requiring significant strategic advice at every stage and was of huge significance for the client, allowing it to scale up its growth and bring more innovative brands to market while continuing to deliver high-quality student accommodation. CMS played a pivotal role in helping the client to achieve its goals.

Other nominations

Bryan Cave Leighton Paisner

Advising Grange Hotels on the sale of part of the reorganised group to Queensgate Investments for some £1bn, a portfolio comprising four upscale hotels offering around 930,000 sq ft of real estate.

Davitt Jones Bould

Advising The Royal Parks on a novel contract for events held at London’s major parks. With government funding diminishing, TRP was faced with raising over £30m annually and events are seen as key to its long-term financial viability.

Simpson Thacher & Bartlett

Continuing work on key client Blackstone’s real estate acquisitions and financings, including a joint venture with Telereal Trillium to acquire Network Rail’s £1.46bn commercial real estate portfolio, as well as on its acquisition of Dream Global REIT’s assets.

Womble Bond Dickinson

Advising South Tees Development Corporation on the acquisition and regeneration of TATA Steel’s former steel works on Teesside; this was the first transaction involving a mayoral development corporation outside of London.

Legal Business

‘Only certainty is even more uncertainty’: Addleshaws shows endurance as firm steels itself for year ahead 

‘Only certainty is even more uncertainty’: Addleshaws shows endurance as firm steels itself for year ahead 

Addleshaw Goddard adhered to an increasingly familiar trend over the last financial year, the firm’s latest figures show, with revenues proving resilient in the last months of 2019/20 while partner profits took a minor dent.

Turnover was up 4% to £288m from £275m the previous financial year, when the firm exceeded all expectations as revenue soared 14%. However, profit per equity partner (PEP) endured a modest decline, falling 5% to £690,000 from £727,000 in 2018/19, when the figure jumped by 12%. Over 80% of revenue was generated through energy and utilities, financial services, health, real estate, retail and consumer, and transport.  

Commenting on the figures, managing partner John Joyce (pictured) said: ‘Our business responded well to a very unpredictable period for our clients with the ongoing Brexit saga, then an election and in the second half of the year the impact of coronavirus, first in Asia and then more widely. After a strong first half, we adapted quickly to the pandemic and to close out the year in-line with plan is testament to the quality and diversification of the firm’s client base and the resilience of our people and the infrastructure built in recent years.’

The consensus is that those free of debt and with meaningful cash reserves are likely to be safest in 2020/21. Despite the fall in PEP, the firm managed to improve its liquidity with net cash closing at £84m in 2019/20, a significant increase on the firm’s £59m balance sheet in 2018/19. Distributable profit, meanwhile, was also up after a small 1% increase to £102m.

Addleshaws also grew its partner ranks over the year, with 24 new partners recruited across construction, energy and infrastructure, global investigations, funds finance, equity capital markets and restructuring. The firm also opened its first office in Germany in June 2019.

Joyce added: ‘The only certainty this year is that it will be even more uncertain than the last but we have made a solid start and some teams remain very busy whilst others have seen their markets badly impacted and arguably have a more negative outlook. We very much retain an appetite to grow and retaining profit from last year, as we did the prior year, alongside the overall strength of our balance sheet leaves us well placed to weather uncertainty and continue to invest and recruit where the right opportunity presents itself.’

thomas.alan@legalbusiness.co.uk

For more on Addleshaw Goddard, see our interview with John Joyce earlier this year: ‘The Addleshaws Interview: The rebound guy’

Legal Business

Sponsored briefing: Technology projects – Plan for success (and if things go wrong)

Sponsored briefing: Technology projects – Plan for success (and if things go wrong)

Addleshaw Goddard looks at the impact of technology on future planning

Involving a disputes lawyer in your business shouldn’t start when you get into a dispute

If you are in business, you are a technology business – this is the reality of the modern marketplace. From the smallest pop-up shop to FTSE 100 entities, technology is at the core. Digitalisation and automation are now woven through every aspect of business, whether front-end customer engagement, supply chains, outsourcing, back-end administration or compliance and audit functions. And this trend will continue; recent data shows many businesses are planning to spend between 20% and 50% of their investment capital on digital projects.

With that opportunity comes risk: increasingly, the prospects and viability of a business are tied to its tech.

Your business needs to be alive not just to the benefits that new technologies will bring to your operations, but also to the challenges inherent when introducing it and, once implemented, your increasing reliance on it. As your business becomes ever-more dependent on technology (with the rise of 5G, artificial intelligence, machine learning, cloud storage, big data and blockchain), so the scale of the risk to your business increases if that technology fails. Several companies have made unwanted headlines over high-profile tech disasters.

Planning for change

Most technology projects are intended as a catalyst for change within a business – whether to vital logistics and administration functions, the customer journey, or the business as a whole. Robust planning processes are essential from the beginning of such projects. All your stakeholders must buy in, so as to realise the changes you are seeking. And even with that planning and commitment in place, most IT implementation projects will often encounter time, money, resource and/or scope issues during their implementation.

Your business needs a clear strategy (commercial, technical and legal) to steer a course to success. And success will demand not just leadership and discipline from the senior management, but also a robust and holistic contract and implementation plan – covering everything from scoping, tendering, contact negotiation and signing, through to the ‘go-live’ and continued operation/upgrades and ultimately exit.

You need to think carefully about what you want to achieve with this new tech and how and when you want to achieve it. Are these deliverables understood by your providers and clearly set out in your contract? Are there sufficient incentives in your contract for the provider to deliver against the requirements and milestones? Will your operations, including your data, be sufficiently protected throughout this period of change?

Getting the right advice at the start could save a series of headaches (or worse) later on.

Planning for challenges

Inevitably, as with all projects, tech initiatives will see varying degrees of success. So you need to be prepared if, or more likely when, your project faces challenges. What levers do you have (contractual or otherwise) to get the project back on track?

And when a dispute materialises, the contract will be tested. Does it place escalation obligations on the parties that are constructive or distracting? Does it encourage co-operation or brinksmanship? How easy is it to withhold payment or services – or even terminate? What limitation and/or exclusion provisions apply? What about exit management? Having a clear strategy that can cater for both success and failure will be key in these circumstances.
Ultimately, you may need to bring or defend a claim. While this tends not to be a GC/board’s preferred option, the prospect of proceedings can sometimes be used strategically to achieve a final resolution, frequently without the need to go to trial.

Importantly, time is often a more critical factor in tech disputes than in many other forms of dispute. Technology evolves at a fast pace. Accordingly, in a dispute it can be vital for issues to be resolved before the existing tech on which the business presently depends becomes obsolete, or the market moves on and your investment (or even your whole operation) is sunk. Where timing is a factor, many businesses will want to consider alternative dispute resolution (ADR) before legal proceedings are commenced. This can include the new contractual adjudication scheme launched by the Society for Computers and Law, a three-month procedure that aims at swift settlement of tech disputes.

Even where a tech project has been implemented successfully, issues may arise later on. Such an issue could occur due to a security breach (eg, hacking incident) or human error (eg, accidental data disclosure). It is increasingly important for businesses to be as well drilled for tech incidents, such as a cyber-attack, as they are for a fire. Prompt action will be needed to secure your tech infrastructure, reassure your customers, regulators, workforce and investors, keep your supply chain intact, restore business critical operations, manage the media fallout and seek redress from the culprits. The extent to which businesses (even ‘big business’) are ready for this type of potentially business-critical risk varies greatly.

Planning for the future

The UK is the third-largest market for AI investment behind the US and China. A report by Microsoft last year showed 56% of businesses are adopting AI, and suggested every company may incorporate it in some form in the next five years. So, before too long, what we currently think of as ‘tech risk’ will just become ‘risk’. An office without email is unthinkable now, despite the fact that many senior executives began their careers in offices without much more than a single computer. It is likely the same will become true of AI, blockchain and many other ‘new technologies’.

Planning for success

As a business, you have a careful balancing act to manage. You will have to continue to evolve your IT systems to remain relevant and ahead of competitors, but you must also do what you can to ensure the new technology is implemented and operated in a way that is as low-risk as possible.

The success of your IT will increasingly go hand in hand with the fortunes of the business itself. Having tech issues resolved quickly and efficiently (and, yes, perhaps quietly), across all your operations and jurisdictions, will be essential.

Engaging the right advisers who can give the right guidance at the right time, taking a holistic view of the business (and not just tech) issues, with full-service capability to act across sectors and borders, and who are themselves tech competent and enabled, can save valuable resource, time and money – and potentially the business itself. And, while you can’t always plan for the unforeseen, having a strategy to deal with such risks will be invaluable in the event of unwanted interference in your business.

 


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Legal Business

The Addleshaws Interview – The rebound guy

The Addleshaws Interview – The rebound guy

Legal Business (LB): Looking at the finances of the firm over the past five years, you are one of the LB100’s top performers. What’s the secret?

John Joyce, managing partner, Addleshaw Goddard: We’ve always had a good business. It lost its way, undoubtedly, and all we’ve done is refocus our efforts. We reintroduced focus on what the firm needed to be doing: international growth, quality work, the clients we look after and deliver in a proper way for, a sector approach… it was just bringing them all together.

Legal Business

The Scots GC debate: Force multipliers

The Scots GC debate: Force multipliers

Hamish McNicol, Legal Business: How do you build your identity and culture as a legal team? And how do you then communicate your teams’ qualities to the wider business?

Findlay Anderson, Baker Hughes Oilfield Equipment: The culture of the legal team comes from two different sources. One is the general counsel setting the rhythm for how they want their team to operate with the business. A lot of that comes down to the personality of the GC. The other factor is how the business sees its legal team: are they a hired function that sits in a corner and you call on them when you need them, or do you put them right in the middle of the decision-making of the company?

Legal Business

Revolving doors: McDermott hires Hogan Lovells private equity head as Dechert loses partners in London and Paris

Revolving doors: McDermott hires Hogan Lovells private equity head as Dechert loses partners in London and Paris

The lateral market maintained momentum last week as McDermott Will & Emery hired from Hogan Lovells with both Addleshaw Goddard and Paul Hastings targeting Dechert.

McDermott added Hogan Lovells’ global private equity head Tom Whelan. Whelan, who is experienced in private equity life cycle, has worked with private equity sponsors, multi strategy funds and corporates. His work includes advising on buyouts, M&A, bolt-ons, restructurings and refinancings through to exits.

Hamid Yunis, McDermott’s London managing partner told Legal Business: ‘We are always looking to build upon the strong practices which we have in London and to add top quality lawyers who are equally focused on providing world class client service.’

Addleshaws has hired restructuring partner Paul Fleming who joins the London business support and restructuring insolvency practice from Dechert.

Fleming has been involved in cross-border work, both in restructuring and contentious insolvency matters and advises creditors including institutional lenders and bondholders, stakeholders, insolvency practitioners and directors.

Partner and head of business support and restructuring, Ged Barnes commented: ‘This is the start of an ambitious strategy for the team which will help us to capitalise on our international offices.  Paul’s expertise in cross border insolvencies, funds recovery work and complex, high value insolvency litigation is a great fit with our existing practice.’

Meanwhile, Burges Salmon hired partner Stuart McMillan to its banking team from DLA Piper. He has worked in energy and infrastructure finance and advised banks and borrowers on project finance, acquisition finance and real estate finance deals involving cross-border financing. He will help develop the general Scottish banking practice as well as the firm’s infrastructure, real estate and energy offering.

Burges Salmon managing partner, Roger Bull told Legal Business: ‘Stuart is extremely high quality with a great reputation in the market. From our perspective, he’s got great experience in relation to finance and projects along with some of the other sectors that we’ve been focusing on like energy and renewables. He has those particular skills that will assist and drive our client offer forward in Edinburgh.

‘Banking is performing well. We’re having strong performance across the firm so far this financial year. The banking team are ever expanding their remit, expertise and focus which is very much aligned with Stuart’s appointment,’ added Bull.

Elsewhere, Fieldfisher has hired Paul Stockley as its new co-head of oil and gas. He joins the energy and natural resources group in London from Womble Bond Dickinson where he was head of oil and gas.

Stockley said: ‘The firm’s reputation for all forms of energy and natural resources work is already well-established across the industry and I am encouraged by its ambitious plans for future growth. I look forward to being a part of those plans, leveraging off a tremendous brand and platform.’

Paul Hastings has added to its Paris office with the hire of corporate partner Charles Cardon from Dechert. He has a focus on takeovers, M&A, private equity, and capital markets transactions.

Cardon advises public companies in their takeover bids, issuance of securities, governance matters, disclosure requirements and relationship with shareholders, as well as corporate law matters.

Meanwhile, in Brussels, Alston & Bird has added senior privacy and cybersecurity partner Wim Nauwelaerts from Sidley Austin.

Privacy and cybersecurity co-chair Jim Harvey commented: ‘Privacy and cybersecurity continue to be increasingly critical issues for CEOs and boards, especially among US-based multinationals that view data protection as a global issue.

‘Wim is an internationally recognised attorney in the EU privacy and cybersecurity arena with a well-earned reputation as a trusted voice in advising senior executives in the US, Europe, and elsewhere on strategic business decisions and initiatives involving their companies’ most valuable data assets,’ Harvey added.

muna.abdi@legalease.co.uk

Legal Business

Case study: Addleshaw Goddard

Case study: Addleshaw Goddard

Back in 2014, not many – if any – would have predicted Addleshaw Goddard would boast one of the highest percentage growth rates in profit per equity partner (PEP) across the Legal Business 100 over the next five years. But with PEP increasing 13% to £730,000 in the 2018/19 financial year, PEP has risen an impressive 87% over that time.

Top-line growth between 2014 and 2019 is similarly impressive, up 61% to £275.4m, topped by a 14% increase year-on-year. In the five years leading up to 2013/14, turnover for Addleshaws had dipped 1% as the global financial crisis weighed heavily. PEP also fell 11% in 2013/14 due to exceptional expenses including partner restructuring and a written off conditional fee agreement – hence the low starting base for the dramatic growth in partner profits over the last five years.

Legal Business

Addleshaws exceeds wildest five-year revenue dreams with 14% bump to £275m for 2018/19

Addleshaws exceeds wildest five-year revenue dreams with 14% bump to £275m for 2018/19

Addleshaw Goddard managing partner John Joyce ‘would never have dreamed’ the firm would grow by more than 60% since his appointment in 2014.

But despite that strong growth trajectory, as well as profit per equity partner (PEP) growth of 89% and a £90m improvement in its cash position to £59m of reserves since the 2013/14 financial year, Joyce (pictured) said the plan is simply to ‘press on’.

‘We get people asking us, “What are you going to do with all that cash?” and the answer’s “keep it”,’ he told Legal Business. ‘We’ll do nothing with it, absolutely nothing.’

Revenue at Addleshaws for the 2018/19 financial year rose 14% to £275.4m, its second consecutive year of double-digit growth and including a near-25% uplift in income from international offices. Profit at the firm exceeded £100m for the first time, a 16% increase, as PEP rose 12% to £727,000.

Chief financial officer Colin Brown said there was above-budget growth across every jurisdiction and division, with England and Scotland up 13% and the GCC and Asia between 20% and 25%. The energy, financial services, health and life sciences, retail and consumer, and transport sectors made up 60% of the firm’s turnover.

Brown pointed to investments over the last five years, which has seen the number of partners grow by 50% to more than 250 and overall headcount growth in lawyers and business services staff of 40%. ‘That is clearly driving some of that growth but a lot of it’s also catering for growth and making sure we can support our clients. We are having to invest substantially, both in our teams and our infrastructure, to drive this momentum and maintain it.’

Joyce added: ‘We’ve achieved more than we could ever have imagined possible. In a sense that gives you an appetite to go on and do more – we’re not going to sit back.’

In June, the firm opened its first continental European office in Hamburg with the hire of a five-partner team from Bryan Cave Leighton Paisner (BCLP), its sixth office outside the UK and twelfth overall. The firm expects to add another German office in the near-term.

Key mandates during the financial year included advising Volkswagen on global alliance and contracting arrangements with Ford for the supply of commercial and electric vehicles; on the £642m hostile bid by DNO for Faroe Petroleum – the largest AIM-listed company takeover in 2018; and for GSK in its long-running product liability case relating to antidepressant Seroxat.

Joyce said investment in the City was a key priority with the firm looking to raise its profile in London, as well as further growth in its other offices. Brown added that the turnaround in the cash position was to give the firm flexibility to both invest and weather potential storms.

‘We’re all aware of the challenges. We thought some were really going to impact last year – they didn’t – who knows if they might this year? Whenever it does, we know there are some firms out there with quite weak balance sheets and this does provide us with an opportunity to do things in a market where other firms might not be as strong as us.’

hamish.mcnicol@legalbusiness.co.uk

Legal Business

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

Dealwatch: Kirkland and CMS drink in $3bn pub group takeover as Slaughters and Latham analyse Moody’s disposal

In the customary rush to get deals over the line before the summer lull, the City and US elite have this week lined up on big-ticket transactions including the sale of Moody’s Analytics to Equistone and Slug & Lettuce owner Stonegate’s $3bn acquisition of pub company Ei Group (EIG).

Kirkland & Ellis fielded a team led by corporate partners David Holdsworth and Stuart Boyd to advise buyer Stonegate as it acquired EIG, the largest owner of pubs in the UK. Stonegate, which was formed when funds managed by private equity group TDR acquired 333 managed pubs from Mitchells & Butler, also owns high street brands including Walkabout and Yates.

CMS advised EIG with a team led by partners Gary Green and Gordon Anton. An Ashurst team led by M&A partner Tom Mercer advised Nomura International, Goldman Sachs International and Barclays, the buyer’s financial advisers, on the recommended cash offer.

Meanwhile, Slaughter and May advised longstanding client Moody’s on the sale of its Moody’s Analytics Knowledge Services (MAKS) business to Equistone Partners Europe Limited, a deal which is expected to close later this year.

Latham & Watkins acted for Equistone on the deal, with a team led by London corporate partner David Walker and including London finance partner Charles Armstrong.

Co-head of Slaughters’ infrastructure group, Michael Corbett, told Legal Business: ‘It’s a significant reflection of Moody’s evolving strategic priorities. They’re in the business of producing high value analytical services to their customers, and the so-called knowledge services that’s been disposed of was non-call for Moody’s activities. It was consistent with a strategic repositioning. It was significant because it’s a global business with a multitude of jurisdictions involved and that always creates some complexity in a context of a carve-out business disposal.’

He added that M&A has shown decent levels of activity in spite of the effect the current political uncertainty has had on sterling.

‘A lot of the work we do has a cross-border element and frankly a majority of the work we do is not necessarily domestic UK, but overseas assets and global businesses,’ said Corbett.

MAKS provides outsourced research and analytical support to banks, asset managers and consulting firms through delivery centres in India, Costa Rica, Sri Lanka and China. The sale proceeds and repatriated offshore cash will be used to repurchase around $300m of Moody’s outstanding stock.

Freshfields Bruckhaus Deringer and Addleshaw Goddard also this week landed lead mandates as the European arm of Australia’s Macquarie Group acquired British telecoms company KCOM in a £627 million cash-only deal.

Freshfields advised (MEIF) Macquarie European Infrastructure Fund 6 with a team led by corporate and M&A partners Stephen Hewes and Andrew Hutchings.

Addleshaw’s corporate partner Richard Lee and employment partner Jonathan Fletcher Rogers led the team advising KCOM group which operate in Hull, Yorkshire.

Finally, Linklaters’ partner Richard Coar led a team advising SSE Renewables, Copenhagen Infrastructure Partners and Red Rock Power on the refinancing of the 588MW Beatrice offshore wind farm off the coast of Scotland. The firm said the deal shows a strong need for offshore wind assets established by an experienced sponsor group. Norton Rose Fulbright advised a consortium of 29 commercial and institutional lenders and 24 hedging banks in the deal, led by the firm’s head of energy, infrastructure and natural resources in London, Rob Marsh.

muna.abdi@legalease.co.uk