Grosvenor is facing a loss of up to £90m from its £1bn retail-led Liverpool One regeneration scheme, it emerged this morning
Cost overruns from the construction of the 42 acre (17 ha) scheme mean that Grosvenor is planning to make a provision of between £50m and £90m.
A spokesman for Grosvenor confirmed that a provision would be made but would not explain why. ‘It’s a very complex project,’ he said. Completion of the scheme is still due in 2008 and more than half of the space has already been let.
Grosvenor funded the scheme in November 2004 when it secured more than £250m of equity from Hermes; Middle Eastern clients of Arlington Securities; the Ryan family, which founded budget airline Ryanair; Liverpool Victoria, the financial services firm; and Redevco, the property company owned by the founders of C&A, the retail chain. Debt financing was provided by a consortium of banks including Royal Bank of Scotland.
‘Our investors are protected,’ the spokesman said. ‘This is Grosvenor’s loss. As the developer we are absorbing any costs above a level agreed with our investors.’
When completed, Liverpool One will feature four retail districts, 30 individually designed buildings, 1.4m sq ft (130,000 sq m) of retail space, a 14-screen Odeon multiplex cinema, 230,000 sq ft (21,370 sq m) of restaurants, cafés and bars, together with more than 600 new apartments, two hotels, offices, a park and new public transport interchange.
The retail space will be anchored by John Lewis and Debenhams.