Brewery site rethink on the cards as new flats fail to sell

THE consortium behind the massive regeneration of part of the former Fountain Brewery is set to go back to the drawing board after selling just one flat in four months.

The first batch of completed flats in the Springside development were brought on to the market at a glitzy launch event in April.

Since then, only one has been sold and developers have been forced to reduce prices by up to 20,000 as dozens of homes lie empty.

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The Springside consortium today insisted that it will continue to develop the site but says it is now in discussions with planners about how it can alter the central part of the site, which was to include hundreds more flats.

Student flats, affordable housing and a hotel are among the current options.

Ali Afshar, director of AMA Homes, a member of the development consortium that also includes Grosvenor and Royal Bank of Scotland, said: "We are fully committed to the site, that is why our cranes are still working.

"I can reassure you there is no wavering in the commitment, but after all you can only go as fast as you sell so there is no point having more and more empty buildings.

"At the moment, we are looking again at the buildings in the central area of the site.

"We are in discussions with planners about what they will be and what format they will take. There are slight changes on uses and that is being formulated just now."

He said that the consortium has been talking to hotel developers, student accommodation providers and affordable housing firms about the land in the centre of the site, but said that the overall make-up of the full site is still likely to be 60 per cent residential and 40 per cent commercial.

Of the initial 58 homes built, 17 were sold off-plan during a one-off marketing day in February 2008.

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But since the flats were completed in April 2009, only one more has sold, leaving 40 empty.

Mr Afshar blames the slow sales on banks lending less for new-build mortgages than they are prepared to for traditional properties, claiming the average buyer of a Springside flat is only offered a 65 per cent mortgage, compared to 80 for traditional properties.

"We've had buyers who find at the last minute they can't get the LTD (loan to deposit] required," he said.

Two blocks of flats have been completed, while a further block is due to be finished early next year, although it will lie empty, with the fit-out of flats not due to happen until later next year.

A commercial part of the site nearest Fountainbridge remains a gap site with these plans currently on hold, although student flats are nearing completion at the opposite side of the site, next to Fountainpark.

Springside is one of several sites that were part of the old Fountain Brewery that were set to be redeveloped. But the two sites on the opposite side of Fountainbridge remain empty.

Stewart Taylor director of business space at property firm CB Richard Ellis, said: "It is very common for developers like this to look at what they can do to generate value, because residential sales are poor across the board for new-build.