The hole being dug in Farnham got deeper yesterday as Blightwells developer Crest Nicholson announced ANOTHER profit warning, the second in five months.
There are now fears of a takeover.
Crest Nicholson has warned shareholders it will lose almost £16 million on Farnham’s long-delayed Brightwells Yard regeneration scheme.
The FTSE 100 developer won the contract from Waverley Borough Council to build the mixed-used regeneration project on land south of East Street in 2003. Twenty years on, and there is still no date for the opening!
Costs are spiralling on the controversial development. Circa £15m is the latest jump in spiralling costs for the £115m redevelopment scheme promoted by the Conservatives at Waverley Borough Council and Surrey County Council. A scheme that Farnham residents did everything in their power to stop! Even taking the borough council to judicial review its decision.
The David and Goliath Fight for Farnham begins!
The warning signs with this project have been clear for all to see for some time, as WW has reported on many occasions. Bad as this is, the situation is almost sure to get worse, creating more financial pain for Waverley and even more for Surrey County Council. Crest Nicholson is licking its wounds and wants to escape Farnham as quickly as possible.
Now, there is a strong chance it could see Crest Nicholson (CNS), a once blue-chop builder, as a target for a takeover. The massive cost jump on the Brightwells Yard development in Farnham and the ongoing problems there are being blamed for the company’s woes.
The development, which should have opened in 2009, is now expected to open?
It boasts 239 apartments, some bought up by Buy to Let landlords. It has 25 shops – only four leased and a Reel Cinema, which may open in February.
In an unscheduled trading update yesterday (CNS), slashed its expected profits before tax in the year to October would now be £41m, 44% less than the £77.7m it had initially forecast in June last year. CNS has now identified further costs on Brightwells Yard.
Barclays, too, warned of ongoing uncertainty about the future costs of the scheme, saying:
“While work on the main buildings at Farnham is largely complete we understand there are some complex works to be completed on the site that will run through 2024”
It comes after the fiasco when Crest was forced to rebuild the roof at the Grade II-listed Brightwell House at the heart of the development for a second time following a planning breach. The developer has scaled down the renovations due to rising costs. The developer has also decided not to replace the temporary bridge from Farnham By-Pass to Brightwells with a larger bridge to cut costs.
Has one of Farnham’s iconic buildings been trashed?
CNS said:
“This site is a highly complex urban regeneration and mixed-use development scheme with a build programme expected to conclude by the end of the calendar year.”