St Modwen takes £21m hit as the Battersea Bubble wobbles

FALLING prices in Nine Elms today forced St Modwen, the developer of New Covent Garden Market, to take a £21 million hit on the value of the scheme.

Worries over the so-called Battersea bubble have been mounting following stamp duty hikes and slowing interest from overseas buyers.

Those fears have been compounded by the Brexit vote, prompting a revaluation of St Modwen’s share in the site, where 3000 homes are planned, from £127 million to £106 million. Recent stamp duty increases also cost it £13 million.

Valuers are pencilling in a 3.75% fall in residential prices, while chief executive Bill Oliver says “inevitably the market is cooling off”. “It doesn’t mean the project is any less viable or any less likely to go ahead,” he insisted.

The shares fell 16.55p, or 6%, to 242.65p as pre-tax profits for the six months to May 31 dived from £206 million last year to £30 million.

St Modwen is unlikely to go ahead with the sale of a stake in the scheme by the end of the year following the vote.

Meanwhile housebuilder Persimmon said first-half sales were 6% ahead of last year. Boss Jeff Fairburn said: “We will keep a watching brief on what the market is like but we don’t plan to change.”