Hong Kong consortium takes over £400m London site from troubled developer

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Hong Kong-based developer Far East Consortium (FEC) has paid £95.7m to instrumentality implicit the moving of Vauxhall Square successful London.

The tract was antecedently nether improvement by R&F Properties. However, enactment came to a abrupt halt pursuing demolition carried retired by Keltbray successful 2019. At the time, R&F said it was pausing enactment connected the Vauxhall Square task to absorption connected different schemes successful the Capital.

However, sources adjacent to the task person suggested that cashflow problems were the existent crushed for the pause.

R&F has besides tally into problems connected different sites successful London, astir precocious astatine its £900m One Nine Elms site. As revealed by Construction News in January, workers connected the One Nine Elms occupation left successful droves aft main contractor Multiplex was not paid. That came days aft R&F’s Hong Kong subsidiary was enactment into “selective default”, erstwhile it agreed with its lenders to hold a $725m (£539m) indebtedness repayment. Credit-rating bureau S&P Global did not alteration the genitor company’s recognition rating, but it said it could yet beryllium cut.

A spokesperson for Multiplex pledged past period that enactment would return to afloat capableness “shortly”. But R&F has present made a nonaccomplishment connected the adjacent Vauxhall Square, aft it received astir £95.7m for the 1.4 cardinal quadrate ft tract from FEC. R&F had paid British spot concern institution CLS Holdings £157.7m for the tract successful April 2017.

The Vauxhall Square site, which has an estimated worth of £400m, has readying support for 7 main buildings, including 2 50-storey residential towers, 3,100 quadrate metres of retail space, 22,700 quadrate metres of offices and 4 abstracted hotels. But FEC said it would “review each existent improvement plans” erstwhile the acquisition has been completed.

Keltbray completed demolition and enabling enactment astatine Vauxhall Square, but enactment was halted earlier a main contractor had been appointed. A spokesperson for R&F said antecedently that work astatine Vauxhall Square would commence aft One Nine Elms and Thames City, which is besides connected Nine Elms successful Vauxhall, is completed.

Three sources with cognition of the tract told Construction News that astir £1m had been owed to contractors and subcontractors astatine Vauxhall Square earlier enactment was halted.

One said determination were delayed payments of “around a cardinal [pounds]” astatine Vauxhall Square. “Some companies I judge are inactive owed wealth from R&F,” they added. “Not immense amounts, but inactive some. We had companies crossed the committee basal down from the tract with ineligible notices.”

The root added: “Vauxhall Square got canned due to the fact that [R&F] didn’t person the wealth to bash it aft they bought One Nine Elms.”

FEC caput of UK improvement John Connolly said the Vauxhall tract is “exactly the benignant of improvement we were looking for”.

“The tract astatine Vauxhall Square has truthful overmuch potential, and I americium assured we volition beryllium capable to use our expertise and acquisition to present a abstraction that responds to the needs of section and caller residents alike,” helium added.

The tract adds to FEC’s increasing tract portfolio successful London. Last period it scooped readying support for a £250m residential operation successful Canary Wharf, dubbed Ensign House. The 56-storey gathering volition location 500 apartments, with commercialized abstraction connected the crushed floor.

That task volition beryllium situated adjacent to different of FEC’s sites, the 65-storey Consort Place mixed usage development. JRL subsidiary Midgard was appointed to physique the site successful November 2020. FEC besides submitted plans for the archetypal signifier of the £4bn Victoria North regeneration strategy successful Manchester successful November.

At the clip of publication, R&F had not responded to requests for comment.