GLOBAL – The Crown Estate, which manages properties technically belonging to the Queen, has joined forces with major Canadian pension fund OMERS in a £320m (€374m) central London development deal.  

The UK company said the deal covered the commercial element of its investment programme for the St James's Market district, where its owns £1.2bn of property with 370,000 square meters of space – almost half of the buildings in the area.

Paul Clark, director of investment and asset management at the Crown Estate, said: "St James's Market will deliver the most ambitious redevelopment in St James's in the last century and represents a major tipping point for our strategy for the area."

Under the terms of the joint venture, Oxford Properties – a real estate subsidiary of OMERS (Ontario Municipal Employees Retirement System) – and the Crown Estate will each take a 50% stake in two limited partnerships.

These partnerships will each own 150-year leasehold interests in two blocks between Regent Street and Haymarket.

The Crown Estate will keep the freehold of the properties and lead the development and asset management of the scheme.

Oxford Properties will bring the strength of its global platform and relationships to the deal, complementing its own team, the UK company said.

It said the 10-year investment strategy for St James's would provide 210,000 square feet of office space and 50,000 square feet of retail and restaurant space, with a run-down back street service yard area being replaced with a new 10,000 square foot pedestrian square.

CB Richard Ellis, Capital Real Estate and Hogan Lovells acted for the Crown Estate in the deal.

The joint venture with OMERS is the latest of three big link-ups with large foreign investors for the Crown Estate.

It formed the Regent Street Partnership with Norges Bank Investment Management, in January 2011, and is set to complete its £100m Gateway development next month, which is a 50/50 limited partnership with Healthcare of Ontario Pension Plan (HOOPP).

The Crown Estate manages £8bn of property, which is owned by the Crown, but not the private property of the UK monarch.

The company's profit goes to the Treasury, not to the Queen.

However, the Sovereign Grant sets the level of funding the Queen receives from the Treasury at 15% of the Crown Estate's profits.