Princes Dock tower becomes latest victim of market slump

Mersey Property Company, the special purpose vehicle set up by a group of Worcestershire-based investors to develop a 33-storey tower on Liverpool's Princes Dock, has ended talks with landowner Peel Holdings to acquire the land for the scheme.

Negotiations were called off after the downturn in the market meant lower rental values and rising construction and debt costs made the scheme unviable.

Planning permission for architect RMJM's design was gained in June last year. A mixed-use project with a gross end value of £100m was envisaged, comprising 120,000 sq ft of offices, a 140-bed hotel and 180 apartments.

MPC had agreed to buy the site, plot 3a, for £6m from Peel. Banks were understood to be willing to finance the scheme but not at the necessary rates to make it work. The scheme was based on appraisals from the start of 2007 and if planning consent had been obtained six months earlier it could possibly have gone ahead.

David Porter, partner at Knight Frank, advising MPC, said: "Sadly, the purchase from Peel has been pulled due to the dramatically altered financial factors in today's market."

Peel owns developable land either side of the site and is now considering incorporating it into a larger design.

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