Plans to build flats and commercial units on Plymouth's waterfront have been temporarily halted due to a lack of interest from potential buyers.
Sutton Harbour Group Plc (SHG) informed investors the current state of both regional and national economies has resulted in a low demand for new developments, leading the company to seek temporary uses for its vacant sites at Sutton Harbour.
The AIM-listed firm had previously planned to erect a £60m skyscraper, but planning permission for the 21-storey Sugar Quay block expired in June. In September, SHG announced it would need to consider a less expensive alternative due to "challenging" market conditions.
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However, in a statement to the Stock Exchange during an annual meeting, the company revealed it has now suspended all plans for new buildings.
In a statement regarding "future new development", the regeneration specialist stated: "Demand for both high-quality luxury waterfront residential property and commercial development is currently subdued, reflecting both the national and South West regional economies.
"The board has therefore decided to pause expenditure on the new developments until the future is more assured and the market recovers.
"To improve revenue and to reduce property holding costs, opportunities for interim uses of vacant sites are currently under consideration and retained property agents are instructed to market this availability.", reports .
SHG received approval to construct up to 170 flats on the vacant site, previously designated for major BBC studios, at Sutton Harbour in June 2022.
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However, among numerous stipulations was a requirement that construction must commence within three years - which it failed to do.
SHG, which in September reported losses of nearly £2m, stated it was exploring a "new lower density scheme" for which it would have better prospects of securing funding, and planned to submit a "pre-application" this year - but has now shelved that proposal temporarily.
The Sugar Quay development's cost was estimated at £60m several years ago, with inflation likely having increased this figure since.
In September, SHG announced the Sugar Quay site's carrying value had been reassessed and was now worth £9.388m less than before, having lost its planning permission.
SHG had previously obtained multiple planning approvals for various proposals on the location, and foundations remain from an earlier cancelled project.
Last year, SHG disclosed that setbacks and escalating expenses during construction of the nine-storey Harbour Arch Quay, also at Sutton Harbour, resulted in a £2.629m loss on the scheme, despite all apartments being sold.
Construction on Sugar Quay, which would have stood just three storeys shorter than the city centre's towering Beckley Point student accommodation skyscraper, was scheduled to begin two years ago, but SHG postponed this owing to economic circumstances and the duration required to complete the flats in a single phase. The firm also considered the time required to sell the apartments in Harbour Arch Quay.
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The business had anticipated the enormous Sugar Quay tower being complemented by eateries and retail outlets, creating a flagship development in the revitalisation of Plymouth's historic waterfront.
Plymouth City Council's planning committee gave unanimous backing to proposals for the structure in April 2022, with the Section 106 legal agreement with the local authority successfully concluded two months afterwards.
Sugar Quay was intended as a "sentinel building" for the harbour.
The proposed design was also set to deliver substantial leisure and retail space, featuring westward vistas towards the marina, the Barbican, and the Hoe, alongside enhancements to public spaces on the eastern side and expansive open areas replacing the existing narrow pathways.