Developers confident in face of the credit crunch

Apr 9 2008 by Aaron Boland, Liverpool Daily Post

THE developer of the £1bn Omega business park, in Warrington, says it remains confident the scheme will be a great success despite the impact of the credit crunch.

Property developer and housebuilder Miller Group said it expected work on the site at the former United States Air Force base in Burtonwood to be under way by summer.

Omega is a joint venture between Miller, the Royal Bank of Scotland and English Partner- ships. Miller finance director John Richards said finance was secured for the scheme.

Miller yesterday said its developments business, which includes Omega, saw record profits of £36m in 2007.

Overall, the company’s pre-tax profits fell 7% to £81.2m, which the company said was “an acceptable performance in volatile markets”.

It said housing volumes for the year were down 10% on 2006 and warned of a challenging year ahead in both its residential and commercial property businesses.

Bank of Scotland recently took a minority stake in Miller, the UK’s largest privately-owned housebuilding, property development and construction business. The size of the debt and equity deal is not being disclosed but Miller said the bank’s move would give the business a more “stable platform” in tough market conditions.

Miller has planning permission for the first two phases of Omega, which it says could house up to 25,000 jobs over 25 years.

Mr Richards said pre-let inquiries at Omega had been “encouraging”.

“We’ve had some good expressions of interest,” he said.

In yesterday’s statement, Miller warned it was “facing the most difficult short-term market conditions in over a decade” but said its construction business and new coal mining joint venture in South Wales would perform well.

It said: “Looking ahead, we expect monetary policy to ease and eventually for demand to pick up. The business is in good shape to take advantage of the opportunities this will present.

“We also possess a record construction order book, a strong housing land bank, and a high quality commercial property portfolio, which gives us confidence of achieving our long term strategic goals.”

Miller’s Warrington-based North West housebuilding division has developments in St Helens, Warrington and Widnes, while the first homes will be released this month on two new Liverpool developments.

alistairhoughton