Developer quits over confidence

Seven Stones Development'Salvation Army Citadel
Seven Stones Development'Salvation Army Citadel
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Property developer Hammerson claims it was unable to commit to starting work on Sheffield’s Sevenstone shopping scheme because of a lack of ‘retailer confidence’.

Sheffield Council has announced it is ending its agreement with the company due to lack of progress.

The council wants to find another company willing to take over the project.

The £400 million scheme – which aims to restore top- name shops to the city centre after years of decline – has been on hold since 2009.

Hammerson says uncertainty over what rents could be charged and ‘retailer confidence’ meant it had not gone ahead in Sheffield - but has in Leeds and Croydon, seen by lenders as more profitable.

Peter Cole, chief investment officer for Hammerson, said: “Such schemes need to have retailers wanting to commit and viable income from rents before they can proceed.”

Mr Cole said the company was ‘disappointed’ at the council’s decision to terminate the agreement.

But he added: “Unfortunately, the original scheme was proposed when the economy went into recession. The council wanted certainty. We had made commitments to Sheffield but we have also been pursuing other commitments in the meantime and we need to prioritise those.”

Mr Cole said even if Hammerson had stayed on board with Sevenstone, construction would still have been ‘18 months to two years away’ because new planning applications have to be made.

The original scheme, which would have cost £600m, has been scaled down and designs changed.

Mr Cole said Hammerson has invested several million pounds into Sevenstone and the project is in a ‘better place’ than for some years.

Sheffield Council is now seeking a new development partner.

Chief executive John Mothersole said: “I think interest will be very strong.”

Richard Wright, executive director of Sheffield Chamber of Commerce said: “There remains a significant and urgent need to get on with the project to prevent further leakage of shoppers to outside the city region.

“The development needs to be something distinctive and right for our city and one which complements the offer at Meadowhall.”