Administrators are to scrutinise all projects under the umbrella of developer Modus Ventures
Modus Ventures was placed into administration last Friday afternoon in what KPMG said could be “one of the first in a long line of commercial real estate casualties”.
The administrator added that while only Modus Ventures had entered administration, the 40-plus companies it owns across the UK – and the viability of their individual development projects – would all be closely scrutinised.
According to construction market intelligence firm Glenigan, Modus companies are involved in a series of projects throughout the country at present.
Plans have been submitted by Modus (Midlands) for a £58m retail and residential scheme in Swindon, Wiltshire, while others have been approved for a £60m commercial project in Newport, Gwent.
Contractor Bowmer & Kirkland has recently finished building a Tesco for developer Modus Properties in Oldham, Greater Manchester. The project was worth about £16m.
Bowmer & Kirkland was unable to confirm whether it had received final payment for the job, but said it was unaware of any problems.
A KPMG spokeswoman said administrators Richard Fleming, Brian Green and Paul Dumbell would have to look at “all the companies, their risk, lending situation and their relationship to Modus Ventures”.
A statement insisted the separate businesses – the majority of which are in the retail property development sector – had been ring-fenced and were not a part of the administration. But the spokeswoman said they could still be affected by the outcome of the process.
Associated companies Trinity Walk Wakefield, Modus Properties (Wigan) and Modus (Wigan) have already been placed in the hands of administrators in recent months.
Modus Ventures and its related companies are separate from London fit-out contractor Modus Group.
KPMG’s UK head of restructuring Mr Fleming said the developer had been in talks with “a number of parties” regarding funding for its ongoing developments. He said administrators would “work with company management to pursue this interest”.
Mr Fleming added: “The group, like many companies within the property sector, has not been immune to the economic downturn and, indeed, we believe will be one of the first in a long line of commercial real estate casualties.