Caltongate deal done 'in weeks'

Published on Thursday 13 August 2009 09:45

SIX developers are vying to take control of the massive Caltongate site, with a deal expected to be completed "in the next few weeks".

It comes five months after the site's owner, Mountgrange, collapsed into administration, leaving an empty hole in the heart of the city.

More than 30 developers are bidding for Mountgrange's assets, which also include a development site at Paisley and another in Kent. Among them, half a dozen are lining up bids for Caltongate.

Bank of Scotland, which is the main creditor of Mountgrange and is owed 73.8 million, had initially wanted to mothball the site for at least a year until it felt the site would be able to fetch a better value.

But it is understood that negotiations are now taking place with a number of investors who are lining up "credible" bids for the site which has planning permission for a five-star hotel and conference centre, as well as scores of shops, offices and homes.

John Reid, joint administrator at Deloitte, said: "The administrators received expressions of interest regarding the Caltongate, Phoenix Park and Maidstone schemes from over 30 parties.

"Each party has been asked to submit their proposals for the schemes with a view to selecting preferred bidders for a stage two process in order to conclude some form of transaction or transactions by the end of September or the middle of October 2009."

It is thought that former Mountgrange Capital directors Manish Chande and Martin Myers remain interested in buying the site.

The city council has been in talks with Deloitte about the site and is keen to remain involved in discussions with the eventual successful bidder.

Dave Anderson, the council's director of city development, said: "We are keen to see it going ahead as through planning if at all possible. Twenty per cent of Caltongate is council property so we want to have a say on who they sell it on to. It can't just be a straightforward financial transaction – we want it to be right for the city."

Any company that takes on the site would have the advantage of already having French hotel operator Accor waiting to occupy the hotel element.

Property experts say a pre-let of office space would be required to make a deal "stack up".

Mr Anderson said the idea of a "government quarter" is still alive, and that could provide the pre-let required to get work started.

But he warned that, even when a buyer is identified, the Bank of Scotland could yet veto a deal.

"Clearly, the bank will have some influence as they will receive what they (the administrator] get for the site," he said. "It is conceivable the bank will say 'hold on' if the bids are too low but, from what I've heard, there are some credible bids on the table and I hope something will happen."