Developer becomes most high-profile casualty of the credit crunch

Northern flats developer City Lofts has been taken into administration, the firm revealed today, becoming the most high-profile developer casualty of the credit crunch.

The directors of the developer, behind a number of flagship residential schemes in Manchester, Leeds, Sheffield and Liverpool, have appointed Ernst & Young to 鈥渞eview the position of the two holding companies鈥�.

The decision follows on from last week鈥檚 action to put a number of the company鈥檚 individual developments in Birmingham, Cardiff, Leeds, Liverpool, Newcastle and Nottingham into administration.

In a statement the firm said it was committed to ensuring the group鈥檚 remaining developments should be able to continue as going concerns.

It said: 鈥淭he administrators will review the position of the two holding companies with the intention that the group鈥檚 current individual developments under construction (other than those in respect of which LPA receivers have already been appointed) should be able to continue unaffected so that value is maintained in the wider group.鈥�

In addition it said the group鈥檚 various subsidiaries and joint ventures set up to carry out individual developments had not been placed into administration. 鈥淚n particular, City Lofts (Half Tide Dock) Limited (Liverpool) and City Lofts (Sheffield) Limited (Sheffield) are continuing to trade with the intention that their respective developments should continue,鈥� the statement said.

In February 好色先生TV revealed that two of the firm鈥檚 schemes 鈥� Elphinstone Place in Glasgow and Kings Waterfront in Liverpool - had been taken back to the drawing board, in part because of the changing market.

The firm also had to deny persistent rumours it had halted construction on its Milliner鈥檚 Wharf scheme in Manchester.

As of April the firm had five developments under construction worth 拢308m, and a pipeline of 2,494 apartments. In December last year, it reported that in the six months to 30 June 2007 its profit was 拢6.3m on a turnover of 拢41.8m, compared with 拢9.5m profit for the previous 12 months.

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