Conygar Investment has said it may need to sell off assets or strike a joint venture so that it can develop its £650m Island Quarter scheme in Nottingham.
The AIM-listed company said it will need to raise “substantial amounts either as debt, or through joint ventures or asset sales” to go ahead with the scheme. “This is a major development and is central to the company’s future,” it added.
A resolution was passed in September to grant planning permission for the first phase of the scheme, which will see a 21,528 sq ft, three-storey waterside pavilion with two restaurants and 5,382 sq ft of events space built.
The company’s comments on the outlook for the project came alongside Conygar’s full-year results, in which it said net asset value plunged 11.8% to £88.8m in the year to 30 September, citing difficulties relating to Covid-19.
The company said progress on several projects had been affected, but that it had “continued to move forward with our ongoing and planned development programme”.
Conygar has revised rental payment terms with tenants hit by the pandemic and set up a Covid-19 testing centre on part of its Nottingham site.
Chief executive Robert Ware warned of a “highly uncertain” outlook for the next year, predicting that difficulties relating to Covid-19 would be compounded by the Brexit transition period coming to an end after 31 December.
“We expect the impact of Covid-19 to significantly affect the progression of and carrying values for our investment and development properties over the coming year,” he said.
“While there remains considerable uncertainty as to how the pandemic will play out, compounded by the impact of a fast approaching Brexit, and pressures on market rents from business closures and rising unemployment, it is extremely difficult confidently to predict the future.”
