Real Estate Gazette: Focus on development, planning and infrastructure

Issue 24

Real Estate Gazette Series

By:

A very warm welcome to Issue 24 of DLA Piper’s Real Estate Gazette, in which we focus on a significant part of our real estate practice: development, planning and infrastructure.

One of the most fascinating aspects of international real estate is the way in which it is continually changing to keep pace with global developments. The dramatic financial crises experienced by many countries in recent years, followed by their fragile and sometimes uneven recovery, has of course led to many significant changes in our industry. Our specialist topic in this issue provides an excellent barometer of the pace of such change.

A selection of articles is below, alternatively you can download the full Real Estate Gazette Issue 23, in two formats:

We do hope you will enjoy reading our views, and if you would like more information on any of the topics featured in this issue, please do get in touch with the authors.

In this issue

  • Denmark’s biggest ever construction project faces multiple issues
    26 MAY 2016

    In March 2016, a majority of political parties in the Danish Parliament agreed on the contracts regarding the future tunnel between the Island of Lolland in the southeast of Denmark and the island of Fehmarn in the north of Germany (the Fehmarnbelt Tunnel).

    The tunnel, which will be the longest immersed tube in the world, is expected to be finished in 2028 and will constitute an important part of Danish infrastructure connecting the eastern part of Denmark with Central Europe. However, a series of legal disputes may disrupt the process and delay the project.

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  • Milan’s Metro5 project
    26 MAY 2016

    Metro5 S.p.A. is the concessionaire for the design, construction and operation of Line 5 of Milan underground network.

    The successful completion of Metro5 is significant for a number of reasons. First of all it is the most visible public–private partnership (PPP) transaction in the Italian market in recent years and the first combination of a project finance loan and a project bond under the new Italian Project Bond law. Furthermore, the Project has captured the interest of a large number of banks and investors active in the European infrastructure market, confirming the bankability of well-structured PPP transactions and also the appeal of long-term, Italian sub-sovereign risk for foreign players.

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  • The rise of build to suit developments in the UAE
    26 MAY 2016

    "Build it and they will come" has been a popular mantra in Dubai property circles arising from a time of frenetic building activity in the Emirate leading up to the global recession in 2009.

    With a slow shift to a more mature real estate market in Dubai there has been an increase in occupiers seeking build to suit deals in order to achieve their requirements for office or industrial space—more a case of "build it upon demand for specific occupiers and they will come."

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  • Subcontractors' direct action and bankruptcy in Spain
    26 MAY 2016

    The impact of the financial crisis experienced in Spain in the last few years on property sales and construction levels is no secret. In the aftermath of the crisis, even some of the strongest construction companies have faced insolvency, with their fall creating shockwaves throughout the rest of the sector. The purpose of this article is to examine how a construction company’s insolvency may affect other players within a construction project with whom agreements were already in place.

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  • Rising construction costs in the UK
    26 MAY 2016

    Following a rise in prices of 10–13 per cent from the lows of 2010, AECOM’s 2015 London Contractors’ Survey estimated that construction cost inflation had risen by 10 per cent during 2015, with predicted increases of 7 per cent in 2016. It remains to be seen whether this 7 per cent increase will actually happen but the trend of rising costs is still an issue in the construction sector. This article considers why construction prices are rising and how employers can mitigate these costs.

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  • Should an owner limit the architect / engineer's liability?
    26 MAY 2016

    Many owners and developers may be unaware that most standard form architectural and engineering agreements and proposals promulgated by design firms contain limitations of liability arising out of the architect or engineer’s negligence (often contained in the fine print “Terms and Conditions” at the end of the proposals). Some of these are absurdly low—often as low as US$ 25,000—while others are somewhat more forgiving and can be as high as US$ 1 million. These limits are generally enforceable in most states, and therefore must be squarely addressed by every owner or developer.

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  • The importance of coordinating dispute resolution clauses in construction contracts
    26 MAY 2016

    A lot of time is spent by construction owners assessing the type of dispute resolution clauses to include in design and construction contracts. In fact, it is possible to debate for hours whether arbitration or litigation is the best method of dispute resolution, or whether there should be a separate procedure for smaller claims and another for larger claims. This article does not seek to answer those questions, but rather, addresses a more fundamental question that causes unnecessary risk and expense for construction owners—do the dispute resolution clauses in place work together to afford an easy and efficient mechanism for recovery in the event of design and construction claims?

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  • Developing and leasing a data center in France
    26 MAY 2016

    As technology changes, the demand for data center (DC) space is increasing with many companies needing somewhere to house large banks of data storage. DCs have not always been an attractive investment, in particular due to investors’ fear that the need for such storage space will eventually disappear. However, in recent years, the asset class has gained popularity in the private equity and real estate sector.

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