Scheme will start next year, says developer
A prominent Westcountry developer has pledged to continue with a landmark £55 million construction project in Plymouth city centre, despite difficulties in obtaining funding.
Speaking to the Western Morning News, Lawrence Butler, managing director of Devington Homes, said that work on the firm's Oceanique development would begin in the spring.
Mr Butler was speaking after the renovation of the Grand hotel in Plymouth, which was gutted by fire in 2003, was completed.
The building has been transformed into 26 apartments – 15 of which have already been sold – and has regained much of its former splendour.
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The renovation process, Mr Butler said, had been relatively painless despite the recession, with funding gained before the crisis.
"We were very lucky because we bought it just as the recession was starting to hit so we got it at a good value, and we managed to build it while the recession was in its full thrust, so we were pretty much unaffected by it (the recession)," he said.
If Mr Butler drew a good hand in relation to the Grand, he has been dealt a dud with Oceanique. Apartments at the former may have sold, but selling the plan for the latter to lenders has been far harder.
The difficulties come despite the development's wide appeal. In addition to two hotels and an array of shops, plans include student accommodation, two cafes and a restaurant.
Plans have been beset by problems and its start date has been moved several times. As a result, some view the project with certain scepticism.
A year ago, Mr Butler was predicting an early 2012 start and citing small changes to the planning as signs of a growing accord. In the 12 intervening months little has changed.
"I'd like to think we'll be on site by next spring. We talk about it and work on it every day," he said.
Asked why he was confident that spring 2013 would at last bring a start, Mr Butler said simply: "I have a gut feeling".
Devington has been trying to progress Oceanique in the toughest trading conditions for several generations. As recently as last week the British Chambers of Commerce downgraded the UK's growth forecast from +0.2 to -0.4 per cent. Housing companies are sitting on swathes of land they are loath to develop, the construction industry has struggled for breath in the airless economic climate. And the banks aren't lending.
"That's one that really got caught by the recession. A project like that, of 500,000 sq ft, is a very difficult thing to fund," he said. "It's very difficult to get money out of the banks. They have to see something profitable. In 2006 you could have bought the thing and had it up.
"In a funny kind of way it weeds out the wheat from the chaff. A lot of marginal projects aren't being built. If we get this built we will know it'll be a success."
A lack of liquidity in the banking sector is an oft-cited problem. Gone are the days of easy investment, and Mr Butler remains unconvinced that the Government has affected much change.
Despite successive rounds of quantitative easing, not enough change is being felt in the South West, he said.
"Maybe in London it is, because the market there is still strong. But this is the South West. I don't think there have been any significant changes because of the Government's actions. Maybe if they amplified the Get Britain Building scheme to £2 billion…"
Mr Butler said he had applied for a loan from government through that initiative but has yet to receive a reply. It wasn't essential, he insisted, just another part of the pot.
In the meantime, he is determined. The investors he is courting are a good blend, he said, and Devington has other plans in the pipeline, including the nearby Pier Street development, which will yield 14 apartments and a café. "There are a lot of people out there who want to invest in something secure – I'd like to think the Devington name is secure."
With the Grand rising from the ashes, the South West will be watching to see if Oceanique can come through its investment trials – travails which seem emblematic of Britain's economic gloom.