The financial close of two major projects, including the new £60 million Inverness College UHI campus, has helped Harper Macleod’s new Edinburgh-based Infrastructure & Projects team conclude deals worth more than £300m so far in 2013.
Lead Partners Euan Pirie and Euan Mitchell, who joined the firm from McClure Naismith in January to head up the team, also closed the £190m Hertfordshire University Student Accommodation project at the end of May, and have another £300m worth of projects in the pipeline for the coming year.
Euan Pirie said: “The start of 2013 has been an incredibly busy period for Harper Macleod and we believe it is set to continue. We are seeing a build-up of good projects and it should be a sustainable pipeline.
“Infrastructure spending has been identified as a key aspect of stimulating the economy and the Scottish Government is delivering. The construction industry is still having a difficult time and major projects are vital to its recovery.”
The new team, which works closely with Harper Macleod’s Real Estate & Construction and Banking & Finance teams, is at the forefront of advances in the models for Public-Private Partnership (PPP) projects, allowing it to close deals from the firm’s Melville Street office on major developments taking place all around the country.
Professor Lorne Crerar, Chairman of Harper Macleod, said: “The success of our new team has exceeded our expectations and added another dimension to the service offering from our Edinburgh office. We look forward to the team continuing to be involved in this high-profile, high-value work, which reflects the growth the firm is enjoying across the sectors in which we operate.”
Harper Macleod, Legal Advisers to the Glasgow 2014 Commonwealth Games, recently revealed its turnover for the past financial year had risen by 9.5% to a record £21 million, while headcount across its Edinburgh, Glasgow and Inverness offices has passed 300.
The Inverness College deal is the first Non Profit Distributing (NPD) college deal and the first NPD project to close in Scotland for four years.
The Hertfordshire University scheme – which will create a ‘zero-carbon’ 3000-bed facility - saw the team play a key role in an innovative bond-financed project which is the first of its kind in Europe. As well as advising the consortium on equity elements, the team advised Derwent Living on the facilities management contract, which will be worth more than £200 million over 50 years.
Other deals concluded by the team this year include the Forres, Woodside and Tain bundle project which saw three new primary health care centres procured jointly by two NHS bodies (Highland and Grampian) for the first time – a deal which saw Harper Macleod devise variants to the standard of project agreement to allow both bodies to contract with a single Special Projects Vehicle (SPV) and avoid the need for legislation to allow the bodies to co-operate.
The team also helped deliver the Kittybrewster Custodial Facility project for what was then the Grampian Joint Police Board in January, and has also been involved in a number of sales in the secondary market for Public Private Partnership (PPP) projects, which see investors selling on their interest in existing PPP projects.
The Harper Macleod Infrastructure & Projects team acts for hub North Scotland - part of the Scottish Futures Trust (SFT) hub process - a joint venture company that will deliver developments worth up to £435 million over 10 years. There are five hubs around the country, with the total programme worth more than £2 billion over 10 years.
Euan Pirie said: “The hub system was a long time in gestation but it is now starting to produce really good projects. Hub North is one of the most advanced so far, but the others are starting to pick up and we are extremely optimistic that we will see a new wave of hub Design Build Finance & Maintain (DBFM) projects coming to fruition throughout the five hub Territories.”
The Inverness campus, which is being delivered by the Miller Equitix consortium, is the first college to be delivered using the SFT’s Non Profit Distributing (NPD) model, an alternative to the much-criticised Private Finance Initiative (PFI) model that ensures that private sector returns are capped, there is no dividend bearing equity and any surplus is directed in favour of the public sector.
Pirie added: “The new NPD model is very streamlined. The costs have been significantly reduced and it is definitely the way forward for this type of project. Achieving financial close after only 17 months proves we can do it and it proves that the system is robust and can deliver.”