The proposed #500 million redevelopment of Birmingham's New Street railway station could force the relocation of up to 50 stores within the Pallasades shopping centre, it emerged yesterday.
However, property investment firm Warner Estates – owner of the Pallasades – is working closely with Network Rail and Birmingham City Council in a bid to thrash out a final scheme which is agreeable to all three parties.
New Street is unable to cope with the number of passengers using it – and at times has become so overcrowded that staff have been forced to close it for safety reasons.
It is also widely considered to be an unattractive introduction to the city for visitors.
The ambitious Birmingham Gateway scheme will cost #500 million, including #380 million from public funds, to create a station with more space and greatly increased passenger capacity.
It would feature a new, enlarged concourse some three-and-a-half times bigger than the current space – and importantly for Warner Estates, a new high-tech transparent roof, or atrium.
Government decisions about a series of funding approvals for New Street are expected between January and July next year. If the plans are approved by the Department of Transport building work could start in January 2009 and be completed by June 2013.
However, Warner, which acquired the Pallasades just over a year ago, yesterday confirmed that it is still involved in negotiations with Network Rail and the City Council to resolve design details of the redevelopment.
Warner's property director, Michael Stevens, said negotiations were being conducted on a monthly and "almost weekly" basis, with the council effectively acting as a facilitator.
Progress has been made with all three parties recognising the urgent need to improve the station, he stressed.
Nevertheless, Mr Stevens said a final agreement has still to be reached, particularly over the question of the impact of the atrium on the Pallasades itself.
Mr Stevens said the current atrium design would probably see the relocation of between 40 and 50 stores within the centre, although it was possible such a mass move "could be accommodated" if the right engineering solutions are negotiated.
Meanwhile, Warner has managed to let ten of the shop units out of the 18 that were vacant when it acquired the shopping centre, which is visited by around 400,000 people every week. Another four units are under offer, said Mr Stevens.
Elsewhere in the Midlands, Warner has invested some #90 million in acquiring a number of large warehouse developments. The company's Radial Distribution Fund – worth #193 million – now owns the 218,000 sq ft Accident Exchange warehouse unit at Hams Hall, bought for #17.6 million.
It has also acquired the 484,000 sq ft Howdens Joinery warehouse in Brackmills, Northampton and the 184,000 Marks & Spencer distribution facility at Radial Point, Stoke on Trent, while contracts have been exchanged for the purchase of a fourth 222,000 warehouse at DIRFT in Daventry. This is expected to be completed in January.
Warner yesterday said it was also confident of making further progress after posting "encouraging" results for the first half to September 30, with pretax profit up by #6.7 million to #42.5 million.
The company said it had achieved its goal of joining the FTSE 250 as the value of its managed property went up by 13.5 per cent to #2.8 billion in the first half.
It declared an interim dividend of 10 pence per share, up by five per cent, while earnings per share of 73.3 pence compared to 52.3 pence last year.
Chairman Philip Warner told shareholders: "Our asset management business continues to expand and we now own or manage #2.8 billion of property."
Shares closed up 17 at 825p.