A decision at last for Euston Station

British Land has been the hot favourite to win the contract to develop the 15-acre, £1bn development above and around Euston Station ever since it made the final cut alongside Sir Stuart Lipton and Elliott Bernerd’s Chelsfield Partners last October. Today it was rubberstamped as preferred partner and is understandably excited by the project at hand. Legal quiet before the development storm  Nigel Webb, head of developments at British Land, said: “We are delighted to have been selected for the redevelopment of Euston Station. “Our proposals will bring forward development of one of London’s largest regeneration sites.” Things will now go quiet says the team working on the project as it enters the legal process to put together the complicated deal. The latest in a series of  masterplans  Plans to redevelop Euston Station are nothing new. Network Rail has for a number of years worked on a series of masterplans. Hammerson’s 1.5m sq ft proposed masterplan for a major office complex around Euston Station collapsed three years ago, when Network Rail’s predecessor Railtrack went into administration. Hammerson, which subsequently sold its long leasehold interests in four office buildings in front of the station to Scarborough Developments, did not bid for the Euston opportunity this time. Eighteen months ago Network Rail launched a fresh competition for a preferred developer. Looking for a fresh start   “It wanted to take a fresh look at the station and we wanted creative ideas – we didn’t want to just replicate a masterplan that had already been done,” says Network Rail’s adviser Helen Shackleton, a director in DTZ’s London markets team. “Network Rail was very pleased with all of the submissions and not just the shortlist. There is a lot of difference between the schemes and with different opinions it is interesting what is possible in terms of what could be delivered.” Iain Coucher, Network Rail’s deputy chief executive, agrees that the strength of the bidding parties has made choosing a partner especially hard: “It has been tough to decide which company to select as our preferred development partner for Euston station.   “Eventually, Network Rail has selected British Land and we are confident that it has the right team and the right ideas to make a real difference for passengers.  This is a once-in-a-generation opportunity to transform a landmark station, so it is not a decision we made lightly”. A “necessarily” slow process Shackleton says that the complicated nature of building across one of the UK’s busiest transport hub has meant the process of selecting a partner has been necessarily slow. British Land made a shortlist of four alongside Chelsfield, Development Securities and Hines in June of last year: “There were major differences in the proposals and by the start of the year negotiations with both parties were not far enough down the line. It is a complicated deal.” Network Rail attached few rules to the brief apart from no contact with local authority Camden council, or local pressure groups. “The concern was that Network Rail, or Camden council or English Heritage would end up saying they did not like the partner chosen because they’d looked at a certain aspects of another scheme in isolation and liked it without knowing about its viability,” Shackleton explains. Network Rail asked bidders to demonstrate three things: a new vision, a financial structure and most importantly deliverability. The real battle begins now  But while British Land may have won the race, the real battle begins now. Pointing to King’s Cross, Shackleton says: “It is not going to be a short process but we hope it is not going to take as long as that.” The latter has already proved the principle of the benefits of developing around transport hubs to Camden council. But the spot is not without its problems. The site is in the viewing corridor for St Paul’s and as Shackleton points out “there are going to be some interesting discussions with Camden about that”. Issues over increasing the capacity of the West Coast mainline will also need ironing out with government before large scale development can get underway. As Shackleton says: “On the basis that we are talking about a 21st century station they aren’t going to want to do something to have to tear it up in five or six years down the line.” Making it all worthwhile The sweetener for British Land is up to 4m sq ft of commercial development. British Land will also have to negotiate with Camden and the GLA to agree development densities. Estimates of square footage have varied from a relatively modest density of 1m sq ft up to a much grander 4m sq ft. With rents rising rapidly in neighbouring King’s Cross, it is easy to see why developers have been so keen. Rents in Euston, part of a market where there is little available prime office space, currently rest at around the £40 mark with Telstar’s letting at Paddington moving the market ahead. There has been speculation that, as a result of the commercial development, up to £1bn could flow into Network Rail’s coffers. However, Shackleton issues a note of caution. She says: “Building in the rail environment is very much more expensive than you can imagine.”