Administrators appointed by £300m Blackpool Central developer
The developer behind the £300m Blackpool Central scheme and Birmingham’s landmark £350m Exchange Square project has appointed administrators from Begbies Traynor.
Manchester-based Nikal is working with Blackpool Council on the new £300m world-class leisure destination off the Golden Mile in Blackpool.
Once the world’s busiest train station, Blackpool Central closed in 1964 and is set to be transformed into a new year-round, world-class leisure destination for the whole family.
One of the UK’s most important regeneration projects, it will be the largest single investment in Blackpool for more than a century. It will create up to 1,000 jobs, bring an estimated 600,000 additional visitors each year, and boost annual spend in the town by £75m.
Nikal has also spearheaded the £350m Masshouse project, which includes a 235-bed Premier Inn hotel, 978 apartments, and 30,000 sq ft of retail and leisure space.
Phase One of the Birmingham project saw the construction of 603 rental apartments across three towers, with heights of 27, 14, and seven storeys, alongside a 5,000 sq ft residents’ hub. LaSalle Investment Management acquired the scheme in a deal valued at more than £100m and is now marketed as Allegro.
Phase Two involved a £77m agreement with Grainger for 375 apartments in a 37-storey tower. In 2023, Nikal completed the 15-storey Premier Inn hotel, which also houses a 6,000 square foot Bar + Block restaurant.
The company’s leadership underwent significant changes in September 2024, when directors Michael Cochrane, Jason Boland, and Richard Fee resigned, leaving Alan Murphy as the sole director.
In its last accounts filed on Companies House for 2023, Nikal said the business had “retrenched further” after another challenging year, and was focused on its two core projects at Exchange Square, Birmingham and Blackpool Central.
This strategy aimed to stabilise the business by concentrating on core assets and reducing shareholder exposure.
Accounts cited major global disruptions such as Brexit, the Covid-19 pandemic, and the ongoing war in Ukraine as key factors that have severely impacted the business. Construction cost inflation over the past three years has been “very significant,” driven by rising material and labour costs, coupled with higher yields reflecting increased risks in the development sector.
The combination of these factors meant Nikal has “seen asset values fall by up to 40% and residual land prices to fall to zero or negative values. This market shift has seen banks and funds less willing to invest or fund new development.”
Nikal expected 2024 to be “as equally as difficult as 2023” but the firm felt “fortunate to predict this market downshift and is now intent on realising profits in the coming years”.
Despite challenges, the firm increased turnover in the year to £54.7m (2022: £48.3m) and delivered an operating profit of £4.3m (2022: £1.6m).
However, liquidity issues persisted due to the timing of working capital repayments and receipts, leaving the company exposed to financial risk in 2023.
As part of a restructuring process in September 2023, Nikal transferred several properties to a sister company, repaid external loans, and secured new financing arrangements tied to these transferred assets.
Nikal and its administrators have been contacted for comment with no response received.
