Yoo Capital co-founder says collapse of ISG was 鈥榬eality鈥� following string of global challenges including covid and Ukraine war
The developer behind the overhaul of the Olympia exibition venue has defended low margins for contractors after a series of design changes on the 拢600m scheme which are believed to have contributed to Laing O鈥橰ourke posting its worst ever set of results.
Yoo Capital co-founder Lloyd Lee said 鈥渆veryone is under pressure鈥� and administrations of firms such as last week鈥檚 collapse of ISG are 鈥渢he reality of what happens鈥� due to the impact of global events such as the covid pandemic and the Ukraine war.
Olympus Property Holdings, a partnership between Yoo Capital and Deutsche Finance International, appointed Laing O鈥橰ourke on the redevelopment of the Olympia Exhibition Centre in 2021.
The mixed-use scheme, which has a development value of around 拢1.3bn, has undergone multiple design changes since it was granted planning approval in 2019.
Council records show four amendments to the main application and a further eight amendments to works being carried out by Olympus Property Holdings on surrounding land.
The changes are believed to have been a contributing factor in Laing O鈥橰ourke posting a 拢288m pre-tax loss in 2023 following disagreements over a price for the job.
The firm, which returned to a slim 拢18m profit this year, said in its latest accounts that cash management in financial year 2024 was 鈥渋mpacted by significant under-valuations and ongoing negotiations on one major contract, which have now been resolved鈥�, understood to be a reference to the Olympia scheme.
Speaking at the Labour conference in Liverpool, Lee admitted there had been 鈥渁 few鈥� changes on the project but 鈥渁ctually there hasn鈥檛 been that many, and in the end, it鈥檚 fine鈥�.
He added: 鈥淲e鈥檙e all getting ready to open, we鈥檙e really excited about something which we鈥檙e proud to show the world, that this is what we can do as a community.鈥�
Asked about the impact of low margins on contractors in the wake of the collapse of ISG, Lee said: 鈥淎ll businesses today are under pressure. It鈥檚 the reality of what happens when you have a 2008/9/10 event, you end up in a Brexit event, then you end up in a covid event, then you end up in a Ukraine event and the world keeps creating global macroeconomic pressures.
鈥淎ll businesses are suffering. Everyone鈥檚 under pressure, the only thing you can do is push back together as a united force,鈥� he said.
Lee declined to say whether he was in favour of a 5% minimum margin for contractors but said: 鈥淚 think in the end, all margins are under pressure, ours are under pressure, local businsses are under pressure, local restaurants are struggling鈥� In the end, that鈥檚 pervasive across all industries.鈥�
The plans for the Olympia venue include a 1,575-seat theatre, a near 4,500 capacity live music venue, 550,000 sq ft of offices, dozens of new bars and restaurants, four exhibition halls capable of holding 26,000 visitors and two new hotels with a combined room number of 350.
Among the scheme鈥檚 amendments submitted to Hammersmith and Fulham council are changes to internal layouts for the music venue, the exhibition hall, a hotel and a 12-storey theatre building.
Public realm has also been altered with an increase in area for retail and access stairs added to the National exhibition venue to allow access to a roof terrace.
The project, which Lee said would begin a 鈥渟oft opening鈥� in mid-2025 before fulling opening by the end of the year, has been drawn up by Heatherwick Studio and SPPARC while others working on the scheme include QS Gardiner & Theobald.
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