More Time Needed To Raise Village Funds

Lend Lease, the developer contracted to build the London 2012 Olympic Village, will need more time to raise funds if it is to continue a deal that gives them exclusive rights to the project.

Due to expire this year, the deal made with the Olympic Delivery Authority that gave Lend Lease control over the development of Olympic Village is unlikely to be renewed after the Australian company fell short of its promise to raise £1bn in private finance for the project.

Citing the banking crisis as reason for Lend Lease’s insufficient funds, the government has already given £95m to the company so that work on the £400m Village could continue.

While Lend Lease may attempt to extend the time in which to raise funds until March, other developers have reportedly shown interest – among them the Qatari development agency and at least one UK-based property developer – should the Australian firm have to withdraw from the deal.

The ODA has reportedly been looking for an additional partner for the social housing element of the 2,800-apartment development to join the associations East Thames Housing Group and First Base already involved, with hopes that a third company will ease the financial pressure Lend Lease is under.

A third agency funding contribution will improve Lend Lease’s chances in attaining interest from banks. Delivering these funds is required if London 2012 is to stay within its overall £9.3bn budget. Should the government have to contribute emergency funds to the Village, the overall Olympic budget could be threatened.