The Island Quarter owner’s assets fall by £34m

The Island Quarter developer Conygar has seen its assets reduce by one-third after being forced to write-down the value of its Nottingham site by £28m.

The revaluation was on the undeveloped and unconsented plots at The Island Quarter.

The group has also had costs of £4.3m and a further write down, of £1.4m of its investment in a proposed residential project in Bristol.

Robert Ware, chief executive said: “Despite the recent change in the UK government impacting both consumer and investor confidence, the improving economic outlook, as a result of lower inflation and interest rates being on a downward trajectory, appears to be slowly improving both the sentiment for, and activity in, the UK real estate sector.”

Conygar’s first phase of Winfield Court, a 693-bed student accommodation at The Island Quarter, was completed on time and within budget in June 2024.

It is now 54% occupied, generating £1.5m in net income before financing costs.

The company secured approval from Barclays to extend the development loan for Winfield Court until December 2025, allowing more time for leasing and stabilisation.

Conygar also acquired the long leasehold of the Virgin Active gym at The Island Quarter for £5.9m, yielding 10.25%.

A planning application for the 383-bed, second phase of student accommodation was submitted in February, with a decision expected early in the new year.

Ware added: “While the market remains challenging and uncertain, and our cash flows remain restrictive, these green shoots of optimism will enable the Group to progress cautiously with a number of emerging opportunities as we seek to maximise the returns from our property portfolio over the coming years.”