Developer's share price falls after it downgrades value of Nine Elms site due to falling house prices in central London

Helen Cahill
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Work Progresses At The New US Embassy Building In Nine Elms
The new US Embassy will be located in the Nine Elms development (Source: Getty)

A property company involved in London's Nine Elms development project has downgraded the value of its portion of the site.

St Modwen cut £21m off the value of the site due to house prices in the central London area falling by 3.75 per cent. Nine Elms is one of the biggest residential building projects in the UK and comprises 19 developers creating 20,000 homes.

Read more: Housebuilders suffer second day of share price falls in a row

However, as the demand for prime property has been weakening in London, St Modwen decided it would not be able to fetch the prices it had been expecting.

The company announced a fall in pre-tax profits from £206m to just £30m in its half year results for the six months to 31 May this morning. St Modwen's share price was down by 3.96 per cent at pixel time.

Bill Oliver, St Modwen's chief executive, said: "Following the referendum held on 23 June, we are now operating in a period of uncertainty in relation to many factors that impact the property market.

Read more: Housebuilders' share prices drop after "dire" construction data released

"Whilst it is too early to accurately predict how the UK property market will respond, until we have more clarity we believe it is appropriate to take a more cautious approach to the delivery of our development strategy."

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