WALTHAMSTOW: Arcade site developer records huge loss
8:29am Wednesday 23rd July 2008
THE company due to redevelop the Arcade site in Walthamstow has made a loss of £20m in just six months - potentially putting the scheme in jeopardy.
The site, on the corner of Hoe Street and High Street, has been vacant for years, and is due to be redeveloped by St Modwen PLC.
Early plans for the proposed multi-million pound complex include an 18-storey tower, a two-floor Primark, a cinema and homes.
But the long-awaited plan may be postponed because of St Modwen's financial difficulties, which it says have been caused by the unexpected steep decline in the housing market.
The company has announced a pre-tax loss of £20m for the period to May 31, and its share prices have plummeted in the same period.
And now the Walthamstow scheme is being reviewed - meaning the submission of a planning application may be delayed indefinitely.
St Modwen regional director Tim Seddon said the property market is facing its toughest period since 1990.
He said: "However, St Modwen's marshalling, development, asset management and cost reduction programmes will enable us to mitigate the worst of adverse market conditions and we will continue to demonstrate our ability to add value even in challenging circumstances.
"In addition, St Modwen's projects are, by their very nature, long term. It is often the case that markets will fluctuate over the lifespan of any given project and their timing and delivery is always managed accordingly.
"With regards to submitting the planning application for the Walthamstow town centre site, we are working with council officers and members to submit this as soon as possible having regard to the economic conditions."
The plans for the Arcade site have caused concern among some residents, who believe the tower would be too tall and that the Primark will drive smaller traders out of business.
In June a demonstration organised by campaign group Fight The Height saw protestors pelt tomatoes at effigies of a Primark store and tower blocks.