John Lewis is facing “extreme challenges” in making a paper profit on its flagship housing scheme.
The scheme to build more than 400 flats above a Waitrose in West Ealing risks costing significantly more to build than it is worth on paper, its advisers have warned.
According to planning documents, the project threatens to deliver a negative return of £57m.
Quod, which undertook the analysis, warned that the “financial viability of the scheme is extremely challenging”, highlighting rising costs from new fire safety requirements and spiralling construction prices, as well as higher interest rates.
The West Ealing development is one of the first major projects to feel the effects of all three headwinds, it said.
Current estimates show the project would cost at around £240m to complete but be worth only £183m based on present-day values.
