Defra has today published the executive summary of a report which examines options for the disposal of New Covent Garden Market.
The report was commissioned by Defra and independently produced by financial consultants PricewaterhouseCoopers (PwC). The consultants were asked to consider a range of options for disposal of the market and the adjacent site and to recommend a way forward to government.
Only the executive summary has been published as the report contains commercially confidential information.
The key conclusions in the summary are:
“The market is not operating on a long-term commercially viable basis. It currently generates a low return and is unable to fund the significant financial capital investment required to maintain the facilities at appropriate standards. Low returns also constrain the Authority’s ability to redevelop the market.
“As a result it is unlikely that the market in its current form would be considered as either an attractive or commercially viable business proposition by a private sector investor. However, it is clear that the market has valuable core assets such as its property base, established network of suppliers and clients, and its brand name/reputation which suggest that commercial value could be generated in the long term, subject to additional investment and business development.
“Understanding the strategic vision of the market going forward for the next thirty years and beyond is key to turning around the business proposition. The physical shape and economic size of the market is a key component of this strategic vision and will underpin any redevelopment of the Nine Elms site.
“Our analysis points to Defra undertaking master planning prior to agreeing a strategic development brief with the planning authorities and before taking the site to the market. This would also allow for the Authority to feed in the requirements for the physical shape of the Market going forward based on a developed strategic vision. This would in turn be influenced by Defra’s views about the extent of the Market facilities which it was intended to preserve going forward.”
Speaking today in London, Lord Bach, Minister for Sustainable Farming and Food, said: “PwC have provided us with a very useful report. It is clear that a good deal more work is required to plan for the eventual disposal of the Market and Defra is working closely with the chairman and chief executive of the Market Authority to plan the next steps.
“The report offers a good foundation for discussions between the Department and the Authority about the possibilities of achieving a viable and sustainable future for the market. One of the key considerations is the scale and function of the market that will be needed in five or 10 years-time. I am looking forward to hearing the Authority’s considered views and will be consulting the Tenants’ Association and other stakeholders as work progresses.”
Baroness Dean, chairman of the Covent Garden Market Authority, said: "For too long the market has operated in a climate of uncertainty but now, through the report, we have options which will be a positive and helpful basis for discussions between all stakeholders who, like the Authority's Board, want to ensure a sustainable future for what still is the UK's leading wholesale horticultural market."
More next week.
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