The prospective purchaser of St Modwen and Vinci’s prize site at New Covent Garden Market has withdrawn from negotiations in a major blow for the prime central London residential market.
It is understood that the party that had been in exclusive talks to buy the 10.2-acre site at Nine Elms, SW8, was a potential new Chinese entrant to the UK market.
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In a stock market announcement, St Modwen said: “We can confirm that a period of exclusivity which was recently granted to a prospective purchaser has now expired.
“The prime riverside site in central London has received high levels of interest and the sale process with other prospective purchasers continues.”
St Modwen’s latest annual report showed a valuation of £395m for its holdings at New Covent Garden Market as of November last year with the 10.2-acre site within it that is for sale – Nine Elms Square – making up almost all of the value.
In St Modwen’s annual results on 7 February, the company said of the process: “Whilst there is no guarantee of any transaction completing, now in exclusive negotiations with prospective purchaser at a level firmly supportive of book value.”
The announcement that St Modwen had been in exclusive talks with a purchaser at book value had been seen as a boon for the Nine Elms residential market, which has been plagued with concerns around overbuilding and subsequent oversupply.
The withdrawal from talks by the firms comes at a time of increasing regulatory constraint around Chinese investors looking to place their money outside of the country, with sources close to the process citing it is as having an impact on the party’s decision. The UK market has seen a dramatic inflow of capital from Hong Kong over the past six months with the path from the autonomous territory a more straightforward route from which to invest.
A sales process for Nine Elms Square began last August and a deal had been anticipated to have then been agreed by the end of last year. The site itself has outline consent for 1,821 flats across three towers of between 32 and 54 storeys.
JLL is advising on the sale.
Timeline: Nine Elms Square, SW8
The ides of March have not been kind to St Modwen and Vinci. The prospective Chinese purchaser of the pair’s 10.2-acre, £395m Nine Elms Square, SW8, site has withdrawn from negotiations.
The overall masterplan consists of four residential sites along with the new flower market.
But the journey to this stage has been long and tortuous – a 10-year battle to get to planning.
■ June 2007: review is commissioned by Ken Livingstone proposes consolidating Smithfield and Billingsgate on the site
■ November 2007: Architect SOM reveals a vision for this site, having drawn up an unsolicited masterplan on the instructions of the market traders
■ November 2007: the New Covent Garden Market Authority (NCGMA) opposes market traders plans, and publishes its own vision for the site
■ April 2008: NCGMA searches for a development partner
■ May 2008: site redevelopment is held up by market traders, who demand a stake in the project
■ October 2008: Government gives initial consent for the NCGMA proposals
■ November 2009: NCGMA reveals its plans – 540,000 sq ft fresh produce market, funded with capital receipts from a residentially led scheme providing 1,800 homes along with office, hotel and leisure space
■ March 2010: the search for a developer begins
■ May 2010: scoping option submitted which includes 2,300 residential units
■ July 2010: six developers selected – Barratt and Kier, Berkeley, Bouygues, St Modwen, Stanhope and Garden Development Partnership, which comprises More London and Skanska
■ June 2011: Barratt withdraws; Vinci partners with St Modwen
■ October 2010: Outline application is submitted for scheme providing 2,443 residential units
■ March 2012: the Foster + Partners-designed scheme needs to be redesigned to “reflect and celebrate the importance” of the site, according to a review by Design Council CABE
■ March 2012: St Modwen and Vinci selected to bring forward the site; St Modwen chief executive Bill Oliver says: “It is a major, major scheme”
■ June 2012: Carlyle and Bouygues launch a legal claim over their failed bid to develop the site
■ June 2012: outline consent that includes 2,503 units given at committee
■ January 2013: St Modwen and Vinci sign contract to develop the site
■ February 2013: St Modwen announces that it has sold 20m new shares, raising £49m
■ September 2013: Scoping option that includes 3,000 residential units is submitted
■ February 2014: St Modwen completes second tranche of public consultation
■ May 2014: planning application that includes 3,019 residential units is submitted
■ November 2014: planning application granted.
And there, as far as residential development goes, is where it ends. However, despite the recent setback, St Modwen stated that the site has received high levels of interest from other prospective purchasers. This site is key to consolidating and placemaking within the Vauxhall Nine Elms Battersea Opportunity Area.
Let’s hope we won’t be talking about its failure to start in another 10 years.
To send feedback, e-mail david.hatcher@egi.co.uk or tweet @hatcherdavid or @estatesgazette
■ This content was originally published on 15 March 2017
