Island Quarter developer to seek ‘substantial’ funding after £22m write down

The developer of Nottingham’s Island Quarter site is in discussions to “raise substantial amounts” of funding after it was forced to write down the value of the scheme by £21.5m.

Conygar has revealed it is “in discussions on a number of fronts” including asset sales and debt funding in order to move forward with the 36-acre scheme.

Conygar chairman Nigel Hamway and chief executive Robert Ware said in a joint statement: “We are acutely aware of the impact that continuing economic and political uncertainty is having on the real estate sector and intend to maintain a disciplined approach to both our cash commitments and financial leverage to ensure our balance sheet remains robust.

“The value from our development projects will be created over the medium-term. Given the progress made, in particular at The Island Quarter, since its acquisition, we remain optimistic about the group’s future prospects.”

The “unwelcome” revaluation was on the undeveloped and unconsented plots at the Island Quarter. However Conygar is optimistic “the unprecedented recent rental growth” in private built student accommodation and build to rent sectors will see values rebound.

It is also expecting a “material uplift” in revenues over the medium term with restaurant and events venue 1 The Island Quarter (1 TIQ) now open and its 693-bed student development scheduled to be completed next May.

Detailed planning consent was granted earlier this year for a 249,000 sq ft bioscience building and Conygar is “progressing discussions” with a potential local tenant that is seeking significant expansion space as well as an investor to forward fund the development.

Other recent progress includes a revised masterplan being agreed in principle with Nottingham City Council that increases the potential development to 3.5m sq ft. Conygar now plans to submit a detailed application for a second phase of student accommodation, with 400 bedrooms, in the coming months.

In 2025 a 223-bed hotel development will launch, which will be shared by the IHG brands Hotel Indigo and Staybridge Suites.