Royal Bank of Scotland and Rok Developments have effectively put their 250,000 sq ft joint venture at Wilmslow Business Park up for sale following poor results in the past week for both firms.
Stuart Longbottom, managing director of Rok Developments, said today: "We are reviewing Wilmslow. Obviously, we own the site and will continue to market it but we will not be speculatively building any office space there unless a major pre-let comes up alongside it."
The proposed scheme is still awaiting planning consent although demolition work has started and, Longbottom said, there is interest from occupiers but just not enough to start building.
In the group's interim results for the six months to 30 June, chairman Stephen Pettit today said he saw "little opportunity to achieve the returns on capital" previously hoped for from the development division, which would be closed. Closure costs were put at £3.8m together with a £7.5m write-down on the value of development land and work in progress. The value of development land was put at £26.6m, to be sold over the next 12 months.
Pettit added: "Rok's strategy remains unchanged, but our business mix is evolving to focus on activities such as repairs, refurbishment and response maintenance. Our core building and maintenance operations have continued to perform strongly, demonstrating that our strategy of locally delivered services on a national scale is a compelling proposition for customers.
"The decision to close our development operation enables us to put these issues firmly behind us and gives us confidence there will be no further adverse financial impact."
Rok's group pre-tax profits rose by 22% to £12.4m on revenues, also up by 37%, to £547m. Revenues from commercial property development fell by 58% to £14.7m in the same period, producing a pre-tax loss of £4.2m.
Last week, the Royal Bank of Scotland, the Wilmslow JV partner, reported pre-tax losses of £691m for the first half of this year after a £5.9bn credit crunch hit.
Elsewhere in the region, Rok has development land to sell at the Links in Blackpool and Atherleigh Business Park, near Wigan.
Rok Developments staff in Manchester, Exeter and Southampton will remain in place to see out existing schemes. Longbottom said the Manchester development team, led by Jonathan Conway and Paul Smith, would remain for "at least a year".
In July, Rok announced it was seeking to sub-let its King Street office in Manchester and retreat back to Salford Quays, where it has a large construction divisional office.
DTZ and Cushman & Wakefield are retained on Wilmslow; King Sturge, PD O'Herlihy and Littler Associates at Atherleigh; and Knight Frank and Robert Pinkus & Co in Blackpool.