Developer gloomy about market outside of the south east
Development Securities is to bring forward detailed design of more than 30,000m2 of offices at four and five Kingdom Street in Paddington.
Announcing preliminary results for 2010, the developer said: “We are now bringing forward, with a view to start in 2011, the detailed design of two office buildings at PaddingtonCentral.” The development is the latest phase of its huge investment in the area, but comes as it admitted it was struggling to let the majority of the Two Kingdom Street development, just completed. It said market interest was “subdued.”
In addition it said its speculative developments outside of the south East remained on hold for the foreseeable future pending an upturn in business confidence. It’s statement said: “Outside the South East, speculative development of commercial offices will be a rare phenomenon in current markets.”
Development Securities reported a profit of £2.6m with the value of its assets rising by almost £100m to £333m, compared to an £11.4m loss in 2009. However it said it was experiencing a “continued reluctance” from banks to lend to the real estate sector
Chairman David Jenkins said the government’s austerity package was a further “cloud on the horizon” He said: “The austerity programme now being introduced in the UK will have an impact which is not easy to predict…If significant large-scale development projects need to await the next phase of the economic cycle, so be it.”