North Street Developer ‘Committed’ Despite ‘Extremely Challenging Economic Times’

Published on: 24 Jun, 2023
Updated on: 28 Jun, 2023

By Hugh Coakley

North Street developer St Edward has said it “remains committed to the regeneration of this unloved part of the town”, after its parent company, Berkeley Group, was given a gloomy assessment by investment analysts for the near future.

A CGI by St Edward of the pedestrianised North Street.

Charlie Huggins, manager at Wealth Club (an investment firm), commented on the Berkeley Group’s preliminary results up to April 2023, saying home buyers and investors were cautious after mortgage rates were raised.

He said, as a result: “Berkeley is battening down the hatches. It has taken its foot off the investment accelerator and will prioritise cash and margins.

“Historically, Berkeley has always emerged from downturns stronger. For now though, near-term prospects for Berkeley and its peers are murky at best.”

Despite St Edward announcing last week it was proceeding with an appeal against the planning rejection in January 2023 and a new planning application, this latest assessment casts doubt on the scheme’s future.

However, Jack Nicholson, a director at St Edward, was reassuring, saying: “There is no doubt that we are in extremely challenging economic times, and somewhat of a ‘perfect storm’; with high interest rates affecting the housing market, increased build costs, new fire safety requirements to provide second staircases, navigating local and national politics, and an incredibly complex planning and regulatory system.

“It takes a huge amount of financial investment and risk to transform a complex brownfield site like North Street. But St Edward remain committed to the regeneration of this unloved part of the town, delivering a new quarter that will bring huge benefits to residents, businesses, visitors and the wider Guildford community.”

The downturn has already claimed one casualty with the contractor going bust on the 300-apartment Plaza scheme on Portsmouth Road, Guildford.

The Dragon asked political leaders in the town for their thoughts on how the economic outlook could affect North Street and other developments, including the 240-home Guildford Park Road scheme, which Guildford Borough Council is the site owner and developer.

Tom Hunt said the council was “considering the potential implications of the current economic climate on our projects.”

The deputy leader of Guildford Brough Council and lead councillor for regeneration, Tom Hunt (Lib Dem, St Nicolas), said: “We’re considering the potential implications of the current economic climate on our projects.

“In relation to the Guildford Park Road development, we’ve done market testing. This has shown there is an appetite among potential partners for this scheme. Before shortlisted bidders submit their tenders, we’ll be exploring their ability to deliver our requirements in the current financial climate.

“St Edward have stated they remain committed to the regeneration of North Street. The planning committee will consider their revised planning application once it’s submitted.”

Cllr Joss Bigmore said “Guildford remains an economic area with strong fundamentals”.

Residents 4 Guildford and Villages group leader, Joss Bigmore (R4GV, Merrow) said: “Obviously it is a tough time for the construction industry generally, given rising costs of materials and labour, increased cost of development finance, and a shaky housing market given the recent sharp rises in interest rates.

“A general election also beckons next year which may bring in a very different government that traditionally has been less supportive of private enterprise, adding to the uncertainty.

“That being said, Guildford remains an economic area with strong fundamentals and a lot of unmet housing need, so I would hope that these are the projects that will continue to move forward while others elsewhere could be delayed.”

We have asked the Conservatives for a comment.

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