Glasgow ‘will struggle to sell properties’ to raise £100m for 2014 Games
CONCERNS are growing that Glasgow City Council will be unable to raise up to £100m towards the 2014 Commonwealth Games due to a decline in interest for regeneration projects. The council is hoping to raise funds from the sale of 56 “surplus sites”. But commercial property experts warn that, given the current state of the market, it is unlikely the properties, which include several former schools, will achieve anywhere near the expected sum.
There are also mounting fears that the council will not be able to find an appropriate private sector partner for the sales, which it is proposing to carry out through a joint venture. With many of the major building companies suffering severe financial strain, sources say there is no appetite for the project.
If it fails to get off the ground, sources warn that the council is going to fall short of the £375m cost of the Games. Around 80% is expected to be met by the Scottish Government, with Glasgow City Council providing the rest. One leading commercial property consultant said: “I’m not sure there is an appetite for the joint venture in the commercial sector. If it doesn’t happen, they are short of a fairly serious capital receipt.”
Another source said: “Companies that tend to get involved with these joint venture projects rely on banks and debt financing, and that’s incredibly hard to get your hands on these days. It doesn’t surprise me that they’ll experience difficulties.” David Bell, director of the public sector group at CB Richard Ellis, warned that regeneration projects are always the first to fall by the wayside during economic downturns due to the higher risks involved. “They are now really quite peripheral in this market,” he said.