By the Save Waterloo Dock Team
19 March, 2021
Is the Latest Proposal Financially Realistic? Has SUM-ONE made a mistake?
ONE of the biggest worries of local residents is whether the latest proposal - for 330 apartments - is financially realistic. And those concerns are based entirely on figures submitted by the developer and its own consultants to the city council.
The original scheme for 646 apartments, submitted in December 2018, led to a wave of objections from every major heritage group in the UK and Europe, local residents, and the thousands of people who signed petitions urging rejection of the plans. So a revised scheme - for 538 apartments in four 10-storey blocks - was submitted the following year.
As is always the case, the application was accompanied by dozens of planning documents, including a “Development Viability Report for Romal Capital Limited”. It was compiled by Land and Real Estate Agency the David Sayer Consultancy, and dated 26 November 2019. This report looked in detail at every option - including both a hotel and offices, as well as various numbers of residential apartments - for developing the site,
It concluded that “Both the commercial office and hotel appraisals show clear negative returns and no market demand in this location.” Its analysis of the financial implications of building offices on the site concluded “the appraisal shows a deficit of £4.8m, equivalent to a negative return on cost of 8.9%.” Building a hotel was also considered unviable.
Unsurprisingly, therefore, the report concluded: “It is clear that residential development on Plot C02 is currently the only viable use to ensure that the infrastructure works and high quality landscaping required are capable of being funded.” The consultants then looked at the financial implications of various residential options in considerable detail.
Section 6 of the report - Viability Summary and Conclusions - said: “the original scheme (for 646 flats) provides sufficient return to ensure that key works can be undertaken.” It added of the “current scheme” that it “also provides an acceptable level of return based on a suitable development platform to cater for a scheme of circa 538 apartments.”
But the authors also analysed figures for schemes that had fewer flats, and concluded that “All of the other options provide either an insufficient, very nominal or negative return and thus (are) not able to support the infrastructure, abnormal costs and landscaping required.”
One of those “other options” is causing local residents particular concern. In Appendix 1 the authors analysed the impact of a scheme for 327 apartments and concluded (Para 5.5.10) “The Development Appraisal illustrates a net profit on cost of 0%”.
A spokesperson for the Save Waterloo Dock campaign said: “This very detailed report concluded that building 327 flats in West Waterloo Dock would not make a penny profit.
“It was compiled according to the economic situation as it was towards the end of 2019. Since then, Liverpool - and the rest of the world - has suffered the deepest economic depression for 100 years.
“So how can it possibly be the case that building just three additional apartments - 330 rather than the 327 analysed in the report - is now financially viable? We are totally baffled.”