Barratt pulls out of $8 billion London development project

FILE PHOTO: A company logo is seen on the side of a house at a Barratt Homes housing development near Preston, Britain, October 9, 2017. REUTERS/Phil Noble

(Reuters) - British housebuilder Barratt BDEV.L has pulled out of a 6 billion pound ($8 billion) development in north London that was expected to produce 10,000 homes due to disagreement over terms with the local authority.

Enfield Council said it had informed Barratt its proposed bid terms for the Meridian Water development project were unacceptable, adding talks with the builder had been terminated after it formally withdrew its interest.

The Council and Barratt declined to comment on what terms they had disagreed over. Barratt declined to say how much the project would have been worth to the company.

“We were simply not prepared to sign up to what we considered to be a poor deal for the residents and businesses of Enfield,” the council said in an emailed statement on Thursday.

Commercial property company Segro SGRO.L, which was Barratt's joint venture partner and a sub-developer on the project, said it hoped it could still deliver its section of the project, which will provide 10,000 jobs over a 20-year period.

“Segro has a strong track record of investing in Enfield ... We are disappointed that negotiations have come to an end ... but we still hope to deliver the e-commerce centre which could create up to 2,000 jobs,” the company said.

Housing experts say Britain needs to build around 250,000 properties a year just to meet pent-up demand. The shortage is particular acute in London, yet industry data on Thursday showed housebuilding activity was weak in London, with housing starts down by more than a third over the past year.

The Meridian Water project, for which Barratt had been named preferred bidder, covers a 210 acre site between Edmonton, Tottenham and Walthamstow, and also includes supporting infrastructure, a railway station and retail space.

A source close to the matter said a venture between construction company Balfour Beatty BALF.L and Hong Kong-based Pacific Century Premium as well as Berkeley Homes BKGH.L were the rival bidders on the project, adding a decision on the project was expected before the end of 2017.

Reporting by Esha Vaish in Bengaluru; Editing by Mark Potter and David Holmes