Clyde Gateway, the regeneration agency that has received £200 million from the Scottish Government, has written down £45m from the value of its land and property assets.
The agency's latest accounts show that assets valued at £59m in April 2012 were written down by £36m during 2012-13, adding to a historic £9m writedown and slashing more than 75% off their book value.
After new investments last year, the agency's net book value is shown as £26m, almost halving the £51m value at the previous year end. Clyde Gateway Developments made a £2.1m loss for the year, almost double the £1.1m loss in 2011-12.
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Our sister paper the Sunday Herald reported last month that the agency had apparently overpaid considerably for a site at Shawfield in 2010.
The site had been independently valued by surveyors Ryden at £2.1m, but court proceedings over the administration of property company Oceancrown revealed that it was one of five sites that had been valued by DM Hall at a total £2.4m.
Clyde Gateway had asked police to investigate in 2011 amid concerns over valuation information provided by the seller.
A spokesman for Clyde Gateway said the DM Hall valuation had only been cited in court. "Everyone seems to be placing great faith in a valuation [for the site] of £700,000 but nobody has been able to produce that particular valuation."
On the substantial writedowns in the agency's latest accounts, the spokesman said: "We are given grant funding to assemble land for regeneration purposes; we have to pay the market value for those purchases."
At Bridgeton for instance, some 20 empty properties had been acquired to create the Red Tree business suites now 50% occupied, with £3.6m invested in development. The revaluation , however, was "substantially less than what we paid to get ownership".
At Shawfield, where Clyde Gateway is creating a "national business district" on the site of a former industrial estate, there had been clearance and compensation costs. "As the site is redeveloped and companies relocate, the asset increases in value," the spokesman said.
The accounts show assets acquired for development were devalued from £21m in April 2012 to £10m a year later, after impairment provisions of £14m. Impairment provisions for assets under construction were lifted from £7m to £20m during the year, while investment property impairments rose from £1.5m to £11m.
The agency's spokesman said: "Everything we have had to do is based on independent valuations."
The increase in impairments reflected an increase in activity, with projects reaching the stage where they could be properly evaluated.
These included Shawfield, the Rutherglen low carbon zone, the former power station site at Dalmarnock, and the redevelopment of the former Olympia theatre at Bridgeton as well as the business suites.
Clyde Gateway was granted £39.8m funding by the Scottish Government for the 2012-13 and 2013-14 financial years.
It was set up in 2007 as an urban regeneration company to undertake projects ahead of the 2014 Commonwealth Games, and is backed by Scottish Enterprise, Glasgow City Council and South Lanarkshire Council.