City centre speculative flats development scrapped

From today's Yorkshire Evening Post (23/11/07): it seems the developers are finally listening to what we've been saying - the 'city living' market has already peaked. Could this now send the jitters throughout other city centre flat developments, and see them axed too?



Green Bank £100m flats plan axed

By Nigel Scott

http://www.yorkshireeveningpost.co.uk/news/100m-flats-plan-axed.3517429.jp

Developers have pulled the plug on £100m Leeds city centre apartments. The decision by George Wimpey City (GWC) to mothball its Green Bank development today sparked new fears over the high-rise market.

More than 800 studio, one-, two- and three-bedroom apartments had been planned on Globe Road, alongside the River Aire and a £1m marketing suite was opened on site in June, 2006. The award-winning design for 2.5 hectares would have been part of plans, unveiled in the summer, to develop a £1bn Leeds 'West End'.

In a statement today, GWC said it had taken "the difficult decision" to postpone construction.

It added: "This is a result of the current uncertain market conditions for high-rise apartments in central Leeds. GWC has notified customers at the site and will be refunding all deposits along with accrued interest."

A spokesman told the YEP: "We are extremely disappointed and regret the inconvenience that this decision may have caused our customers."

He said the company would be conducting a review of plans over the next 12 months. It is understood GWC pulled the plug at the 11th hour as construction contracts were about to be signed.

One Leeds businessman, who asked not to be named, received a letter from GWC yesterday saying the two apartments he had paid a deposit for were not going to be built. He told the YEP he planned to buy one for himself, as an investment, and one for a family member. He said: "On the one hand, I'm disappointed. But maybe I have had a lucky escape rather than buying into the market at a bad time."

Green Bank, launched in 2005, also had space for shops, restaurants and offices. When the scheme was first announced, apartment prices started at £105,000 and went up to £350,000. The most recent starting price for apartments was £162,500. Leeds Civic Architect, John Thorp, had praised the developer's vision as "striking", adding it would create "a dramatic canal and river crossing gateway at the western edge of the city centre."

This summer it was included as part of a joint marketing strategy bringing together the developers of several of Leeds' most ambitious projects – including KW Linfoot's proposed giant Lumiere towers.

But Wimpey's shock decision to shelve it comes in the wake of a recent housing market assessment, commissioned by Leeds City Council, which indicated there could be an over-supply of city centre apartments. A council report said external research showed "demand for city living had not proved to be as robust as initially anticipated".

Property adviser DTZ also warned during the summer that investors were turning their backs on apartment schemes and said a "question mark" existed over demand for units in Leeds. It warned of a "steady decline" in investor interest due to "stagnant" rental levels and little potential for capital growth as the housing market nationwide is squeezed.