Lovells scoops property work for Abbey National

Lovells is advising the Abbey National Group for the first time on a sale and lease deal worth around £460m.

The bank is selling its branch network and offices and agreeing to a 20-year contract to occupy them on a flexible basis. The deal was inspired by the Government's private finance initiative and will be the first significant transaction of its kind in the private sector.

Shell sold 180 core freehold petrol stations in a sale and leaseback transaction in January, but Abbey National is going further by selling its entire portfolio of freehold and leasehold properties.

Lovells' head of property Bob Kidby, who leads the Abbey National team, says that his department's pioneering role as an adviser on property outsourcing was crucial to winning the work in a pitch last December.

Kidby advised the Department of Social Security on the outsourcing of its estate and is advising the Inland Revenue. Lovells also advised London and Regional Properties (LRP) when it successfully bid for the Shell petrol stations.

Referring to the DSS deal, Kidby says: "Techniques had to be invented to allow that transaction to go ahead. It has become a blueprint."

Lovells head of property litigation Nicholas Cheffings, partner David Lane and property assistant Katherine Watts are working with Kidby on the deal.

Kidby says: "Major occupiers of space are looking to remove risk and add flexibility by appointing those who are specialists at running property to look after the buildings for them. This is about unbundling assets, getting rid of risks and creating a less lumpy asset to hold.

"We are delighted to be helping Abbey National in this ground-breaking transaction which I am sure will be followed by many other companies in the banking and non-banking world."

Herbert Smith and Wragge & Co are advising Morgan Stanley Real Estate Fund and LRP, which are making a joint bid for the property portfolio, while Linklaters is acting for second bidder Mapeley, a company backed by Fortress Investment Group and Soros Real Estate Partners. The successful buyer will be announced in the autumn.

Previously, Denton Wilde Sapte and DLA advised Abbey National on property deals. Neither was available to comment on whether they had pitched for work on the deal.