Spanish subsidiary of troubled UK developer announces discounts

The Spanish subsidiary of troubled UK developer Taylor Wimpey is reducing prices on properties it can't sell on the Costa Blanca in attempt to tempt reluctant investors.

Taylor Woodrow de España, which is currently advertising a 25% discount on selected projects, claims it is merely being flexible and responding to demand but commentators say it is sheer desperation.

It marks the beginning of a trend that could see more developers following suit as the Spanish property market continues its downward spiral.

'We are adapting ourselves to client's needs and expectations,' said Victor Sague, sales and marketing director for Taylor Woodrow de España. He confirmed that the discount is available on units in its Pollentia Mar project on Mallorca and Calpesol in Calpe, near Alicante. Reduced units now sell for €210,000 and €186,000.

Sague also added that the company expects to extend the reductions to other developments.

'Whatever language they want to use this is sheer desperation. Sales in Spain have plummeted to an all time low and developers are laying off employees and have virtually stopped new builds,' said Kevin Cooper, an independent property consultant based in Alicante.

Certainly the latest figures from the Privincial Association of Real Estate Promoters shows a 96% decrease in the number of new builds in the Alicante province, and 50,000 new homes unsold.

'There will be more problems in the property sector in coming months, since the market in new homes is paralysed,' said Miguel Blesa, President of Caja Madrid, Spain's second biggest mortgage provider.

Today Taylor Wimpey announced it has failed to raise £500 million to keep its business afloat. It is facing severe problems due to the downturn in the construction sector and has borrowings of some £1.7 billion.