Struggling developer Urban Splash has formed a new joint venture with property group Pears as part of a move to refinance £135million of its existing debts
The North-West based regeneration specialist, which posted increased losses of £15.4 million last year (AJ 03.01.2013), owed huge chunks of money to the RBS, Co-op, HSBC and Blackstone,
It is understood the new partnership with the ‘cash rich’ Pears Group, will help bolster Urban Splash’s remaining Braun portfolio - 35 properties including Fort Dunlop in Birmingham, the Matchworks in Liverpool and Smithfield Buildings in Manchester.
Last year Urban Splash announced an extensive restructure and the sale of a number of key properties including Will Alsop’s Chips apartment block in Manchester as well as completed schemes in Bradford, Leeds, Stalybridge and Bristol to social housing landlord Places for People in a deal worth £77 million (see AJ 26.07.13).
Urban Splash Chairman Tom Bloxham claimed the deal was part of the company’s ongoing strategy to refinance its bank debt through long-term joint ventures with strong partners.
He said: ‘This is a watershed moment for Urban Splash.
‘Since 2008 our company, like virtually every other in our sector, has been restricted by its debt burden. It is sad to see how few other northern property development companies have even survived. It has been a tough five years for the industry, but I’m proud that during that time we were able to deliver some great award winning projects.
‘We’ve also been working hard since 2011 to refinance our debt and form new joint venture relationships with strong stable financial partners. This deal with Pears will allow Urban Splash to continue to do what we do best – develop and manage ground breaking and award winning regeneration schemes across the UK; something we’ve done for more than 20 years.’
Jonathan Rose, Group MD of Pears Property added: ‘We have been delighted to assist Tom and the Urban Splash team in their refinance. We look forward to working together.’