Kier Group and the Ministry of Justice (MoJ) have exchanged contracts to create a £36m Supreme Court in Parliament Square, London.

Kier Group’s development arm Kier Property will renovate the Middlesex Guildhall in Parliament Square with plans to complete by the start of the legal year in October 2009.

Kier was selected as preferred bidder in August 2006 and contracts were signed this week.

The project will be financed by a lease-and-leaseback arrangement where Kier’s capital construction costs and developer’s profit will be met over a 30-year period. Kier takes the head lease and leases on a 30 year period to MoJ. The annual rent to be paid by MoJ to Kier will be £2.1m a year, with fixed annual uplifts of 2.5% a year.

Lord Falconer, secretary of state for constitutional affairs and Lord Chancellor, said: ‘This signals a major step forward in the creation of the Supreme Court in a place that is separate from the Houses of Parliament. The highest court in the land should be open, accessible and independent. The Middlesex Guildhall will be transformed into a building suitable for such an important institution and enable the court to take its rightful place alongside its prestigious neighbours on Parliament Square.’

Feilden+Mawson and GHK Architects are the architects.