Mortgaged?

By Boris Mellor
September 13 2009

According to last week's Guardian, the "Arsenal have sold only two flats at their Highbury Square development in the past 13 months, according to documents lodged at the Land Registry. Having previously received deposits on 235 units in the first 12 months of their release in June 2006, and another 282 the following year -

booming sales figures led the Arsenal chairman, Peter Hill-Wood, to announce in the club's interim accounts in February 2008 that the project would turn over £350m."

The hoped for bonus from Highbury Square would have given Arsenal an opportunity to pay off some debt and buy players. However the credit crunch has seen sales trickle to a halt and 60 units remain for sale.

The Guardian believes that,  "Arsenal will have money troubles if there are similar restrictions on their £133m loan on the Highbury Square development due for repayment in April 2010, although there is confidence about the progress of refinancing negotiations. Indeed, although the club's football and property operations are separate, their ability to raise a net £29m through player sales will not have displeased lenders."

The problem could be compounded if many of the sales for which they received deposits failed to complete. Arsenal are yet to make these figures available.

Ivan Gazidis has argued that, "the worst-case scenario at Highbury Square is for the club to break even on its investment."

Even if Ivan is right that will still mean that the main Arsenal debt on the new stadium remains untouched.

A year ago when Arsenal Times argued that the Credit Crunch would derail Arsenal plans some readers dismissed the idea, saying that loyal supporters would continue to buy them. They forgot that the banks have no loyalty to Arsenal, and that supporters with empty pockets can't spend.

This probably explains why Wenger has not spent the bonus from Adebayor and Toure. Things will remain tight for a long while yet.