THE flagship £200 million Friars Walk shopping centre development in Newport remains on course to be started next year, despite the withdrawal of developer Modus from the joint venture.

The scheme is one of the five owned by Modus in a joint venture with investor and developer Ciref, and Modus is set to sell its 50 per cent stake in these developments because, according to a report at propertyweek.com, it is not in a position to provide capital.

But Modus boss Brendan Flood told the commercial property publication that Friars Walk could still start in the third quarter of next year, and optimism remains high in Newport.

The project is being backed by Modus Corovest (Newport) Limited, the Corovest part referring to the link with Ciref (Corovest International Real Estate Fund).

The Argus understands that Corovest is still very much on board and that Modus' decision will not derail the project, which is seen as key to the long term regeneration plans for Newport.

"I am confident that the retail scheme project between Newport city council and Corovest will continue, and we are hoping to get the development begun sometime in 2009," said John Burrows, chief executive of the urban regeneration company Newport Unlimited, which is involved in helping piece together the deal.