Ground Lease in respect of land at Southend Hospital

The Mid and South Essex NHS Foundation Trust" ("MSEFT") intends to enter into an Option Agreement with Noviniti Dev Co 12 Ltd ("Noviniti") giving Noviniti the right to call for a Ground Lease in respect of land at Southend Hospital ("the Hospital") as the site of a proposed building for intended hospital uses and clinical space including a Day Surgery Unit ("the Potential Development").

The Option Agreement will be for an initial period of 39 weeks (subject to extension). MSEFT has had valuation advice and will grant the Ground Lease (which will be for a minimum term of 45 years subject to earlier break rights) ("the Ground Lease") at a premium which reflects market value as advised by independent valuation advice.

The Ground Lease does not contain any development obligations upon Noviniti and does not in itself permit Noviniti to undertake the Potential Development unless MSEFT elects to grant a Licence for Alterations to Noviniti authorising it to undertake the Potential Development.

The contractual arrangements are structured as a land contract within Schedule 2 paragraph 8 of the Procurement Act 2023 ("the Act") and underlying case law, and as such an "exempted contract" for the purposes of the Act and the Procurement Regulations 2024.

Whilst the Option Agreement and Ground Lease contain no provisions authorising the Permitted Development, MSEFT contemplates the possibility that it may choose to enter into further contractual arrangements with Noviniti at a point in the future (subject to separate MSEFT authorisations) subject to terms being agreed between Noviniti and MSEFT. If terms are agreed, then MSEFT may authorise Noviniti to undertake the Permitted Development via a Licence for Alterations. At that stage, Noviniti and MSEFT (together with other relevant third parties) would enter into an Agreement for Underleases leading to (inter alia) the construction of the Potential Development and the grant of underleases to MSEFT of parts of the completed Potential Development.

In the event that MSEFT chooses not to enter into further documentation with Noviniti, then MSEFT will have a right to terminate the Ground Lease on the second anniversary of the date of the grant of the Ground Lease, provided that works to construct the Potential Development have not commenced . The Ground Lease is subject to a further break clause in favour of MSEFT on the 40th anniversary of the date of grant of the Ground Lease. Noviniti will also have the right to break the Ground Lease at the expiry of the first anniversary of the Ground Lease.