The property slump may claim a major scalp in Birmingham city centre with a delay in the construction of a 44-storey residential tower at Snow Hill.
Developers Ballymore are reviewing the timetable for completion of the £500 million mixed-use regeneration scheme.
Although work has begun on building the footings of Snowhill Phase 3, it has been confirmed that poor market conditions could halt the residential element, being marketed as the highest habitable tower in the city.
The project includes two landmark skyscrapers designed by award-winning architect Glenn Howells, one containing 332 luxury apartments and the other housing Birmingham’s first five star hotel.
Council leaders remain confident that the smaller of the two towers, a 23-storey block, will go ahead and be completed on time.
US operator Starwood Hotels & Resorts has already announced its intention to open a 198-bedroom Westin Hotel and Spa in the finished building. A senior council source said: “It is fair to say Ballymore are reviewing the timetable for completion because of the market. But the five-star hotel operators are still on board.”
Ballymore has described the 1 million sq ft Snowhill project, on former car parks off Snow Hill Queensway, as a model for mixed use, sustainable regeneration.
Once completed, it will create a new city centre business district close to Colmore Plaza, which was completed earlier this year, and Colmore Row.
The first two phases are under construction and will provide 600,000 sq ft of prime commercial space.
One Snowhill, 120,000 sq ft of offices, has already been snapped up by accountants KPMG, while Two Snowhill set new records for Birmingham with the city’s largest ever pre-let confirmed to Wragge & Co, solicitors.
Ballymore spokesman Paul Keogh said the company was now focusing all of its resources on completing Two Snowhill.
Mr Keogh added: “Snowhill has been a great success story for both Birmingham and Ballymore.
“There is nothing unusual or negative in our approach to the phasing of Snowhill. “Two Snowhill is the priority at present as a result of the Wragge & Co pre-letting and our resources are focused there.
“Phase 3 is under review only in terms of phasing and timing and this is normal business practice.”
The two towers, designed by award-winning architect Glenn Howells, are interlinked by a landscaped piazza which will house a 10,200 sq ft heath club and spa, a 15,900 conference centre and a selection of retail outlets totalling 3,500 sq ft.
Situated between Colmore Row and Snow Hill Queensway, both towers will have a slender glass and steel façade and a sleek curved profile.
A key component of the scheme is new public space, including an art wall that is planned to run the length of the development and become one of the longest linear works of art anywhere in Britain.
A range of restaurants, bars and quality retail arranged around new open public spaces such as landscaped squares, tree-lined boulevards and piazzas, will also be created within the development.
A council spokeswoman said Birmingham appeared to be escaping the worst of the downturn in the construction industry affecting the rest of the country. Inward investors remained confident in the city’s position as a major business centre.
She added: “We are holding up well in Birmingham in challenging circumstances. We are in a strong position because we have commitment to a number of public infrastructure projects such as New Street Station and the new Library of Birmingham.”
She said the council had no indication of delays in any other of the major regeneration schemes planned in the city centre.
* Why are we waiting? Paul Dale looks at other major Birmingham city centre development schemes where work is yet to start.
Arena Central: Almost 10 years in the planning, a £500 million mixed-use scheme creating 8,000 jobs on the site of the former Central Television studios. Proposals include offices, shops and the 50-storey V Building.
Planning permission has been granted and work was supposed to begin earlier this year, but last month Arena Central Developments went to the council asking for permission to hand over £5 million planning gain payments in stages.
The council agreed on the basis that not having to find the money up front would increase the likelihood of the project proceeding “in the current circumstances”.
Martineau Galleries: A £550 million scheme to transform the north-eastern part of the city centre around Dale End, linking the Bullring and High Street with Eastside.
The project, to include apartments, shops, offices and a hotel, will be one-and-a half times the size of the Bullring when it is built and is expected to create 5,000 jobs. Planning permission was granted to the Birmingham Alliance in March 2006. The council expected work to begin this year and to be completed by 2011. Starting date has been put back to 2009.
No 1 Snow Hill Plaza: A £230 million scheme to demolish the existing 20-storey Kennedy Tower and build a 29-storey office block in its place, making a striking new gateway entrance to the city centre.
Blue chip companies looking to relocate to the West Midlands are expected to be interested in the 40,000 square metres of Grade A office space proposed on the site. Kenmore Property Group has said it expects work to begin next year and be completed by 2011.
Paradise Circus: First envisaged in 2002, the £1 billion redevelopment of Birmingham’s civic heart remains on the drawing board.
The council is talking to an as yet un-named developer about a mixed-use scheme to provide high-quality offices, apartments, shops and a hotel. Planners have said in the past that work on Paradise Circus is unlikely to begin until Arena Central has been completed.
Eastside Locks: Formerly known as Ventureast, this £500 million scheme is the next stage of the Eastside regeneration. Developers Goodman International expect to begin work early next year, subject to planning permission being granted.
The centre piece will be 675,000 sq ft of Grade A office space, which is being billed as one of the largest projects of its kind anywhere in the UK within walking distance of a city centre. The rest of Eastside Locks is likely to consist of about 480 flats, a hotel, shops and units for small businesses.
British Land Tower: Proposed £160 million replacement for the NatWest Tower on the corner of Colmore Row and Newhall Street. Planning permission for the 35-storey office block is expected to be granted later this year.