Crest Nicholson has pulled out of a key Thames Gateway residential site following its take-over by lenders last week.
The housebuilder announced it had withdrawn from the Erith Western Gateway regeneration scheme, which was backed by the Homes and Communities Agency and Bexley council.
Group director and regeneration chairman Chris Tinker blamed “extraordinarily turbulent times” for the decision, which had been made with “regret and huge disappointment”.
Crest completed a debt-for-equity swap with its lenders last Thursday that saw banks receive 90% of the developer’s shares in return for slashing £630m off its £1.13bn debts.
The gateway is a network of 13 sites, nine of which are owned by the council, on which Bexley council intends to create a “riverside village for the 21st century”.
Bexley said it would now start re-tendering for a development partner for the riverside site, on which it hopes to create more than 500 homes, leisure and recreational facilities and improved open space.
Council leader Teresa O’Neill, said: “We are all clearly disappointed at this decision which we know was not taken lightly. In the current economic climate a lot of businesses are reviewing their priorities and we understand that many developers will need to focus on schemes already underway.”
The HCA, the national regeneration agency for England and Wales, and housing association Orbit South, which was to take the affordable homes in the scheme, said they remained committed to the project.
