A £107million project to transform the area around one of Aberdeen’s most famous landmarks is expected to go ahead despite the construction company behind it suffering a large slump in annual profits.
Morgan Sindall, whose businesses include Marischal Square developer Muse Developments, yesterday reported a 34% drop in underlying earnings for last year, to £31.3million.
It also said it faced “upward pressure” on supply chain costs and skills availability, which created management challenges.
But the group has continued to generate cash and the Press and Journal understands the plunge in profits will have no impact on Marischal Square, or any of Muse’s other current urban regeneration projects.
Muse plans to transform the area in front of Marischal College, drawing people into a new public square flanked by a hotel, offices and shops.
Initial designs divided public opinion, with some architectural experts expressing concerns that “mistakes” of the past were in danger of being repeated.
Work to demolish St Nicholas House got under way last summer to make way for the development.
Marriott Residence Inn has been named as the preferred hotel operator, and development partner Aviva Investors has said there is “strong” interest in the office and retail space.
Manchester-based Muse said yesterday it aimed to submit a planning application for the whole scheme by the end of March.
It added: “The proposed Marischal Square development will include a mix of offices, a four-star hotel, cafes, restaurants and retail space, as well as public space, a small civic square and a pedestrianised Broad Street.” Muse said it made progress on a number of major regeneration schemes across the UK last year and had a “healthy” development pipeline, worth £2billion.
Stephen Turner, the firm’s regional director for Scotland, added: “Our strong track record and flexible approach makes the company an attractive proposition for major projects like Marischal Square in Aberdeen, which will deliver a vibrant new mixed-use quarter at a time when the city continues to embrace an economic boom.
“With similar successful projects across the UK, Muse is ideally placed to take advantage of new opportunities in Scotland during 2014.”