Waterfront woe: 'Forth Ports is not alone in its difficulties'

Published on Tuesday 17 March 2009 09:17

ALTHOUGH on the surface of it the fact the land bank held by Forth Ports on the shore has dropped in value by £220 million in the past year seems alarming, it is only likely to see development delayed rather than cancelled. During a recession that would have been a likely scenario anyway.

The company's chief executive Charles Hammond made it clear in yesterday's Evening News that the redevelopment of the waterfront remains a long-term goal – and a timescale of 30 years for a total transformation remains a target.

It is not as though Forth Ports is seeking to sell the land. Had it been seeking to do so, such a massive drop in value could have been disastrous. But Mr Hammond is right in his assertion that finding development partners or those willing to finance the regeneration in the short term will be difficult.

All around massive construction projects by private developers are grinding to a halt. Speculative build has all but ended while money is hard to come by and lenders are unwilling to risk backing them.

Land values continue to drop at a frightening rate. Last year Forth Ports saw the value of its land bank fall by a mere 8m, a drop in the ocean compared to yesterday's figures.

But it is not alone in experiencing such difficulties. In general over the past 18 months the value of land in Edinburgh has plummeted from around 2m an acre to 500,000.

Other projects have been shelved too. An 80m development at the former Fountain Brewery was scrapped last month after Buredi Fountainbridge went bust.

Serious doubts exist over the future of the controversial 300m Caltongate development as the company behind the massive project – Mountgrange – faces a battle for survival after reporting losses of 24m.

And plans to create a 500m new town on the edge of Edinburgh at Shawfair have been thrown into chaos after one of the lead developers, Miller Group, pulled out – 12 years after plans were first unveiled.

Such set-backs have to be expected when the country is in the grip of a deep economic downturn and the closing off of avenues to some should provide opportunities for others. The city council – often outbid by private companies – is one such body waiting in the wings. It plans to build more than 1100 affordable houses and it may never have a better chance to acquire land cheaply.

With the council's access to funds there should be opportunities for joint ventures which will not only help keep the building sector ticking over but will provide vital employment for those seeking work due to the postponement of other major projects.