Demolishing ideas: In the current economic climate, doubt hangs over plans for three ambitious tower developments in Plymouth. Will they all hit the dust?
Could Plymouth’s towering ambitions be clipped by the credit crisis? In the past two years, three high-profile tower developments have been proposed, but now there is doubt about which ones will go ahead.
English Cities Fund is proposing a modest 18-storey building at Millbay and Plymouth-based Architects Design Group has designed a 24-storey tower, called New Horizons, at the Beckley Court site on Armada Way. The tallest proposal, however, is Devington Homes’ 31-storey Oceanique on The Crescent, which got planning permission at the end of last year.
All three developments include commercial as well as residential space. But there are already several apartment schemes under construction in the city. Demand for commercial space is wobbly, and developers are facing funding issues.
Despite a good start to the year, with 75,000 sq ft of office space let in three deals, Ifan Rhys-Jones at King Sturge says a 30,000 sq ft speculative office scheme out of town has gone on hold because the developers’ funding was withdrawn. He adds that a number of office requirements have also gone on ice.
“We were talking to an occupier with a 100,000 sq ft requirement, but that has gone cold,” he says. “Two 6,000 sq ft requirements have gone that way, as has a 30,000 sq ft requirement.”
ECF’s tower is part of Clyde Quay – a phase of development for which a detailed planning application is due to be submitted at the end of the year – at the £300m mixed-use Millbay regeneration.
Howard Morris, project director at Muse, which alongside Legal & General and English Partnerships, makes up ECF, is positive that the development will move along as planned. “The funding is in place, with equity from shareholders and banking facilities,” he says. “In the regeneration game, you’ve just got to keep going.”
Once planning permission is secured, a start on site will still be dependent on prelets to a hotel operator and key bar and restaurant units. Morris is hopeful an announcement will be made about tenants in the next few months. “Occupiers are competing for space at the scheme, but we aren’t trying to set a record rent.”
The news is not so good for the Horizon development. If all had gone to plan, the scheme, which includes student accommodation, residential and commercial space, would have been due for completion as the tallest building in Plymouth this summer. However, it seems to have stumbled before it got going. The developers had difficulties making the scheme stack up financially. And now that the existing tenant at the site, Western Mortgages, has decided to remain, it looks as if the proposal is firmly, if not permanently, on ice.
Peter Ford, planning implementation manager at Plymouth council, says: “Because of the nature of the scheme at planning, we did question whether it would actually stack up, and that’s been going on for a number of years. So, I’m not overly surprised that it’s not coming forward.”
At Oceanique, the grande dame of the proposed towers, and potentially the South West’s tallest building, stories have been circulating that the start of construction had been put on hold because of the credit crunch.
But Lawrence Butler, managing director of Devington Homes, says this is not true. “We have a tenant on the site – lawyer Foot Anstey – which is in the process of moving, and as far as we are aware, that move is going to schedule. So we were never intending to start on site until next year anyway.”
The £125m scheme comprises 109 flats and restaurants, and is part of a wider development that includes around 65,000 sq ft of offices, a further 63 flats and retail space.
Plymouth has seen a resurgence in recent years, attracting big name developers, such as P&O Estates, which developed the 654,000 sq ft Drake Circus, and Urban Splash, which is redeveloping the Royal William Yard. A trio of towers on the skyline would be the icing on the cake, but it looks as if market forces could have stopped this, for a while at least.
Residential market feels the crunch
The sale of a flat in Plymouth for a record £1m last year stunned many. It put the city and its residential market firmly on the map, and many of the cranes on the city’s skyline are thanks to residential development.
But the ill-wind of the credit crunch is blowing, and while the market for housing and high-end residential seems to be holding up, there is a question mark over city-centre flats.
According to King Sturge, there are around 400 flats under construction in the city centre, and more than double that number are proposed.
“Lower price and higher price properties are still selling, but it is the mid range of £250,000-£500,000 which is tough, and that is our largest market,” says Andrew Bullivant at King Sturge.
This has yet to be reflected in values, but Bullivant says that developers are sensible to the market forces at play: “Developers are saying that they understand that the market is tougher for buyers, and are prepared to listen to serious offers.”
Mike Oldrieve, director at local agent Vickery Holman, says: “Selling houses is OK, but some of the apartments will have to go on ice. There are 12 major schemes around Plymouth with consent, but how many are going to come out of the ground?”
