Maxim's developers accused of flooding market for office space

DEVELOPERS behind Maxim, the giant office park off the M8 near Glasgow, have been accused by rivals of "distorting" the market and offering "unsustainable" incentives in what has become an increasingly desperate battle to attract tenants to empty offices in North Lanarkshire.

• Iain Mercer: North Lanarkshire market 'distorted' by Tal CPT

The rivals blame Maxim's owners - a series of wealthy private investors including Motherwell Football Club director John Boyle - for going ahead with an "unjustified level of development".

Three years ago the firm behind Maxim, Tal CPT, built ten office buildings on the site of the former Chunghwa Picture Tubes factory in order to take advantage of massive tax breaks. Currently the office park lies largely empty, although it is understood to be in negotiations with the Scottish Environmental Protection Agency (Sepa) to relocate there.

Iain Mercer, who owns the office development Innovation Park in Bellshill through his company Cosmopolitan Investments, said Maxim's decision to build ten office buildings all in one go put too much stress on the North Lanarkshire market.

"There is well in excess of 1.5 million sq ft overhanging the North Lanarkshire market, and three-quarters of a million is sitting in one location (Maxim]," he said. "Putting the recession aside, that distorts the market, it distorts market values and distorts rentals and everything else.

"Where we were sitting four or five years ago we were undercutting the market by 60 per cent, whereas now, everyone else has slashed their rents and we are seeing enormous incentive packages on offer which are frankly unsustainable in the long term," he added.

Stephen Lewis, development director for HF Developments, which owns the Strathclyde Business Park in Bellshill, agreed incentives were "unsustainable" and said the development of Maxim was "unjustified".

"I can fully understand why some property owners have a problem with the scale of development and incentives, if the rumours of circa 10 years rent free are to be believed. When desperation gets this intense, it really distorts matters, its not about property - a home for businesses - but the finance that clouds the decision."

Innovation Park recently lost a major tenant, Blackhorse, after its parent group Lloyds Banking Group decided to close parts of the business. Of the two buildings Cosmopolitan built on the site, one still has not been let. Maxim's developer, Tal CPT, was unavailable for comment.