According to an article published a few days ago in The Telegraph, Chinese developer R&F Properties has sold another of its flagship project with a massive loss, amidst very poor demand from residents.
R&F 50% stake in the Thames City scheme at Nine Elms in London have been sold to its joint venture partner CC Land Holdings for almost £270m, has sold its stake to its partner for HK2.66bn) including a loan after the pair paid £470m for the site in 2017. According to the company, they expect to record a loss of £187m in the transaction.
Thames City (also called Nine Elms Square) was one of the 3 main sites owned by R&F. This scheme consists of 1,417 new homes, shops and restaurants, and around 120,000 square feet of commercial space across 12 buildings, including 3 skyscrappers.
In March, we reported that R&F sold their Vauxhall Square site for only £1 and will transfer the £95.7m in debt to Hong Kong-based Far East Consortium (FEC). This deal means that this is now unlikely to see anything happening on site before 2023 or even later. Construction Enquirer reported that the new developer will now review the existing Vauxhall Square scheme, which means that this is likely to lead to a new planning application.
R&F last huge project is for One Nine Elms, a mixed-use project of two residential towers of 56 and 42 storeys, alongside a 173-room luxury hotel, which are due for completion in early 2023 (but will never be finished at the time due to the current situation). We wondered at the end of March whether this site was the next one to change hands, after the sell of Vauxhall Square. With the sell of Thames City, this is the last site owned by R&F and this time more than ever likely to be sold too. In January, Construction News website reported that work at One Nine Elms was put on hold and that it might jeopardize the entire redevelopment of the area.
Nine Elms in the press: a disastrous urban regeneration, the destruction of London, a monument to the degeneration of our capital
In their article, The Telegraph says:
“A Chinese developer behind the flagship Nine Elms regeneration has sold its 50pc stake in one of the biggest projects in the area for a massive loss following disappointing demand from residents. […] The Telegraph previously reported that fewer than 90 flats were sold in 2020, with more than half sold to related parties such as employees or friends of the developers, according to company filings in Hong Kong.”
The Telegraph published an article in 2021, with a scary title (and no question mark!): Investors flee nightmare on Nine Elms street. According to the newspaper, a source on a neighbouring site said:
“There’s a massive centre of gravity on R&F within Nine Elms, success or failure may come down to how they handle the situation. Currently, I don’t think 100pc of the developments will be built and that could pose a huge issue.”
Articles published about the situation are alarming: The Evening Standard published: “Nightmare on Nine Elms: £3bn development’s struggle to find buyers“; The New Statesman said: “Footage of swimmers in a transparent pool built between two London skyscrapers exposes a major housing scandal.“; the Guardian explained: “Penthouses and poor doors: how Europe’s ‘biggest regeneration project’ fell flat“; Prospect Magazine wrote: “Nine Elms and the destruction of London – Vauxhall Nine Elms and Battersea now stands as a monument to the degeneration of our capital“; and yesterday, King’s Business Review published: “Nine Elms Nightmare – A Case Study of Disastrous Urban Regeneration“.
In the meantime, the Conservatives Council is in total denial of the situation. As living in an alternative reality, Councillor Guy Humphries, Chair of the Planning Application Commity made a passionnate speech at last December Council Meeting, describing the opposite of what has been reported for months in the media. He was trying to defend the Tory legacy and praised their ‘proud‘ achievement in Nine Elms:
“There’s a genuine sense of community that switched from a huge building site to people coming and going about their lives. […] As Chair of Planning I I’m particularly proud of the role my Committee and my officer team have played in helping to shape this new community.”
In two days, Labour is expected to win Wandsworth local election and take control of the Council. If this is confirmed, it will be interesting to see how they deal with that Tory legacy.