One of the three developers behind the beleaguered Shard development said this morning that the three were having difficulties securing funding for Europe’s tallest tower.
Swedish property company CLS Holdings, which is developing the tower with Irvine Sellar’s Sellar Properties and Syrian investor Simon Halabi, said in its interim results published today:
‘Negotiations in respect of the funding for the project are at an advanced stage but have, unfortunately, been affected by the recent adverse credit markets. It is hoped that the funding can be finalised in the near future in conjunction with a restructuring of the shareholding structure. We will not commence any major development works until the loan finance has been secured.’
It is the latest blow for the consortium which last week was rocked by the news that its main tenant – Transport for London – was drawing up a ‘fall back’ list of scheme it could occupy if the £1bn Renzo Piano-designed scheme fails to be developed (PW news 14.09.07 front page).
The consortium plans involve the 88-storey tower and a smaller office scheme called New London Bridge House. The entire development is known as the London Bridge Quarter.
CLS in its half year results reported a 5.4% increase in adjusted net asset value a share to 869p. It also revealed a 43.8% fall in first half pre-tax profit including gains on investment properties and its operating profit, excluding gains on investment properties, was also down 10.9% to £22.8m.
The value of the company's property portfolio, including share of joint ventures, is valued at £1.2bn, up 5.2% in the first half of the year.