Credit crunch impacts City Lofts/David McLean towers

Rachael Tinniswood

The main residential element of Liverpool's Kings Waterfront regeneration project is likely to be scaled down by joint venture partners City Lofts and David McLean Homes due to fears about the market.

The scheme was set to deliver 429 units in three towers and was given planning permission in September 2006. However, speculation is mounting that the developers will resubmit plans to build a reduced number of flats.

The JV pair bought the site from English Partnerships in January 2007 for £17.6m. The sale paved the way for EP to fund the Arena & Convention Centre Liverpool next door, the centrepiece to the 36-acre project.

Commenting on the possibility of a revised plan by City Lofts/David McLean, Martyn Green, partner at King Sturge, said: "It is always prudent to consider your market prior to making financial commitments. Until we see a revised plan it is impossible to say, but apartments will always be well received in this location as it has so much infrastructure and re-development around it.

"I think early release for sales rather than re-submission and delays would have been the answer. The current investor market is still good and Liverpool is receiving much positive hype at present and developers are keen to make the most of it.

"Mann Island was nearly 400 units in prime Liverpool Waterfront and that sold to investors, One Park West is still selling really well, the City Lofts product is very good and they are experienced developers who, I am sure, know exactly what they are doing."

A joint statement said: "City Loft Developments, David McLean Homes and English Partnership are working positively together to revise the planning permission in light of the current market conditions."

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