Plans to build 140 homes on the site of a demolished Aberdeen office block are in doubt due to “volatile” market conditions.
Greyfriars House, on the Gallowgate, was torn down amid plans to bring more people into the struggling city centre.
The building had been home to the Department For Work And Pensions office, and latterly was adorned with a colourful Nuart mural.
Owners Telereal Trillium spent 18 months trying fruitlessly to find a new taker for the office space when it became empty in 2018.
They eventually decided to seize the “strong opportunity to deliver city centre housing” instead.
Those plans were approved in July 2020, and it is thought the subsequent demolition scheme cost £350,000.
So what has gone wrong since then?
Lockdown understandably hampered any immediate efforts.
The project has also been delayed as negotiations with the council continue over using its Gallowgate car park as a base for construction workers.
The owners began marketing the land in April 2021.
But by the end of that year, concerns about the “sensitive” nature of the scheme were growing.
Wary would-be partners “scrutinised” many of the 20 conditions placed on the project when the local authority granted permission in principle.
In a recent application to the council, seeking further variations, Telereal Trillium explain how one particular deal fell through.
Why did builders pull out of Greyfiars House talks?
Papers state: “During the marketing period, negotiations progressed with a selected favoured party which showed a serious interest in delivering city centre residential apartments.
“However, after protracted discussions on the basis of sale, and planning clauses, it was not possible to finalise a deal that was on acceptable terms to both seller and purchaser.
“This was largely due to increasing build costs and inability to confirm the council’s position on giving an allowance for construction lay-down compound at the adjacent Gallowgate car park.”
What next for scheme?
No detailed designs have yet been lodged with the council, which would outline the vision for how the flats would appear on the site.
And Telereal Trillium has now had to “review the options for re-marketing and the levels of planning risk”.
They say that a renewed effort in the coming months could reignite the interest of the previous housebuilder.
However, they add: “But the current economic climate is volatile, and housebuilders or developers are nervous about city centre projects which are often plagued with complications.
“Telereal has reviewed this site with close scrutiny on the marketability of the asset.”
The company is now examining conditions which could put off potential interested parties.
The latest submission concerns the stipulation that any development should be connected to the Aberdeen District Heat and Power Network.
This, bosses say, could be a “potential block” on it ever coming to fruition and are asking for it to be removed.
Property specialists warn of city centre troubles
Meanwhile, a letter attached from property specialist Savills explains that city centre sites like this one can be tricky to market.
The firm started advertising the Greyfriars House plot in the summer of 2020.
They now say housebuilders are more eager to build on greenfield sites as they can “purchase the land in phases” and “better manage their cash”.
Council rule change boosted plans in the beginning
The proposed development is one of many to have fallen under the council’s affordable housing waiver.
The scheme, designed as an enticement to developers, meant that they would not have to include affordable homes if construction starts within 12 months of securing full planning permission.
Earlier this year, councillors agreed to keep it in place until 2025 and Savills has asked that it be applied should construction here ever get off the ground.
You can see the latest planning application here.
Conversation