St. Modwen Falls After Bidder Fails to Complete London DealBy
Period of exclusivity with buyer said to be Macrolink expired
Sale process continues with other bidders, St. Modwen says
St. Modwen Properties Plc, the U.K. property developer, fell the most since July after confirming that talks to sell a plot in London’s Nine Elms district to an unidentified buyer ended without a deal.
Macrolink Group, a Beijing-based conglomerate, ended talks to acquire the 600 million-pound ($732 million) land plot, according to three people familiar with the plan. A unit of the company had secured an exclusivity period to buy the 10-acre (4-hectare) site at New Covent Garden Market from U.K. developer St. Modwen Properties Plc and France’s Vinci SA, the people said, asking not to be named because the talks were private.
The Birmingham, England-based company’s shares fell as much as 7.49 percent and were trading at 316 pence at 2:55 p.m. in London. A spokesman for the venture declined to comment on the identity of the proposed buyer. Macrolink did not immediately respond to telephone calls and Wechat and Weibo messages seeking comment.
“St. Modwen can confirm that a period of exclusivity which was recently granted to a prospective purchaser has now expired,” the company said in a statement Wednesday. “The prime riverside site in central London has received high levels of interest and the sale process with other prospective purchasers continues.”
Residential land values in central London fell the most in at least five years in 2016 as sales taxes and Brexit hit demand. Developers are sitting on a record number of unsold homes after sales of luxury properties under construction in the U.K. capital dropped to the lowest level since 2012.
St. Modwen’s prospective buyer had agreed a price at a “level supportive of book value” for the site, the Birmingham, England-based developer said in a statement last month. The plot was valued at 621 million pounds ($723 million) about a year ago, when the owners said they planned to sell the asset. The companies subsequently wrote down the value of the plot by 21 million pounds in July after residential prices in the district fell.
Property magazine Estates Gazette earlier reported that talks with an unidentified buyer had ended. A deadline to exchange contracts on the sale had been missed, Bloomberg News reported Friday.
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