Developer Wrenbridge has pulled out of the project to redevelop the Bircherley Green shopping centre, describing it as "the most challenging project we have been involved with".
Wrenbridge have been managing the project for investment fund manager Savilles since 2012, engaging architects Corstorphine and Wright and holding public consultations and managing planning applications for the shopping centre and hotel.
An amended planning application for the shopping centre was withdrawn two weeks ago, with a spokesperson for the owners blaming "a depressed retail sector and subdued housing market".
The shopping centre has been closed since the remaining tenants left last year. The shopping centre's car park and bus station toilets closed at the same time.
Investment fund managers Savills and owner Diageo Pension Trust will now have to decide on the future of the site.
Wrenbridge have issued statement on Twitter which reads:
In 2012, we were appointed to the Bircherley Green project by Savills Investment Management (The Fund), who manage the development on behalf of the owners of the site.
Pressures on the retail and construction markets, combined with local planning conditions, have made the Bircherley Green regeneration the most challenging project we have been involved with.
Based on the current plans, the cost of redeveloping the site will be significantly higher than the value of the completed scheme. No business could deliver a project of this scale at a loss and that is the stark choice faced by the Fund. It was on this basis that they took the decision to withdraw the recent Phase 2 planning application.
We have recommended to the Fund that they explore new options for Phase 2 without us. We believe a fresh start and a new team will give the best chance of delivering a sustainable long term future for the site.
We are continuig to help with the Hotel Phase of the scheme with a continued strong relationship with Savills Investment Management and we hope the project can be delivered successfully.
Wrenbridge continue to be involved in the hotel project on the corner of Railway Street and Bircherley Street.
East Herts District Council and Savills have been approached for comment.
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