York-based contractor Shepherd Construction has signed a deal this week to rescue its £210m Trinity Walk shopping centre job in Wakefield from administration and build it as originally planned
Shepherd will team up with development manager Sovereign Land and US pension fund Area to buy the scheme off administrator KPMG.
The move comes as contractors are increasingly being forced to look at investing in developments to ensure work goes ahead.
None of the parties involved in the Trinity Walk deal would comment on the price, but Shepherd is known to have invested millions in the project.
Shepherd will remain main contractor for the development, which went into administration half-built in March this year, owing the contractor £15.5m, a sum it has since written off.
The contract to finish the job is now worth £60m to Shepherd, and will involve up to 250 people employed on the site at peak after it restarts in the new year.
The deal has happened despite the fact developer Centros appeared to be on track to take the development on over the summer. It even went as far as engaging Mace to take on the project. However, it is thought its backers eventually pulled out.
Allan McDougall, Shepherd’s chief executive, said the firm was considering doing similar deals in future: “We were determined this one wouldn’t get away. We’ve learned a hell of a lot and we will be looking round for other opportunities. I hope maybe we can do another two – we’re looking at a number of similar deals at early stages right now.”
A number of other contractors are known to be on the verge of similar deals to rescue struggling schemes by taking an equity stake in them.
The chief executive of one rival contractors said: “Shepherd is onto a good thing here, but in general there’s a temptation to get pulled in to financing schemes. You need to ask, why have the original backers pulled out?”
Shepherd was also this week named preferred bidder with Amber Infrastructure for a £50m redevelopment of Liverpool’s central library.