A matter of timing: Much anticipated and long awaited, regeneration in Greenwich could yet be stalled by the economy
It has been called the year of delivery. After all the promises, the rhetoric is finally due to be translated into a radically new and improved landscape for Greenwich.
Swathes of housing are at the heart of plans to regenerate this corner of south-east London, but the timing could hardly be worse. With economic clouds darkening, there are fears that the delivery of these much-publicised schemes could face delays, if not death.
Peter Courtney, director at Lunson Mitchenall, says: “Given the market conditions, I’ve no doubt that certain schemes will get mothballed.”
His view is not uncommon, but few are ready to point the finger at those most in jeopardy. As one developer comments: “We’re keeping our ears to the ground and just waiting to hear which plans fall silent.”
The major schemes seem reasonably secure in their funding. Greenwich Peninsula Regeneration, a joint venture between Lend Lease and Quintain Estates, is understood to have in place a mixture of equity and debt funding secured on a plot-by-plot basis for its £5bn regeneration of Greenwich peninsula.
Plans for the 190-acre site include 10,000 homes along with 48 acres of public spaces, a 3.5m sq ft office district and 350,000 sq ft of retail space.
Progress has hardly been rapid, but a 135,000 sq ft office prelet to Transport for London seems to have given the developers the shot of confidence they needed to start moving forward with delivery.
Planning consent is now in place for 741 houses, and Bellway Homes is on site with the first phase.
Works is under way to provide 152,880 sq ft of space for Ravensbourne College, plus retail space which will then be leased back to GPRL.
First Base’s The Heart of East Greenwich scheme, which it is funding via a mix of corporate equity and third-party debt, is another proposal expected to receive planning permission this year, with work starting at the beginning of 2009.
The mixed-use scheme, on the site of the former Greenwich District Hospital, will deliver around 650 homes as well as a town centre for East Greenwich. The scheme will also be one of London’s first majorzero-carbon developments.
And last month, Greenwich Planning Board granted detailed approval for phase two of the £400m Love Lane scheme in Woolwich. The 1.5m sq ft scheme incorporates 960 homes, 35% of which will be affordable, and includes a library, local council service centre, civic offices and an anchor supermarket along with other shops and cafés.
But a question mark remains over who will inhabit all this new space, both in residential and office terms.
East London agents admit that large office enquiries are easing off, and many are pinning their hopes on the 2012 Olympics to generate some fresh interest. Others point out positives, such as the lack of speculative build at Canary Wharf and a growing demand from education-linked occupiers. Only time will tell if these pointers translate into deals.
On the housing front, there is concern that the sheer amount of homes will prove difficult to sell at the necessary values.
Richard Powell, director at First Base, says: “There are quite a few developments in the pipeline, and it’ll be interesting to see which ones do come forward. A lot of the Greenwich regeneration is lower-value housing but, in the current climate, even that becomes difficult to afford. If you haven’t got a £25,000 deposit, you can’t afford to buy.”
Flexibility may be the key. By phasing the housing developments, much of the stock need only be released in several years’ time, when it is hoped conditions will be more favourable.
And, on the brighter side, London does appear to be faring better in the slowing housing market than the UK regions. A recent report by Savills suggested that regional developers were experiencing a higher rate of slowdown than in the capital.
“Overall, it’s a period of adjustment,” says Vanessa Clark, director of the east London business team at Jones Lang LaSalle. “Developers are not necessarily abandoning their plans, simply pausing to take stock. It’s a sensible approach.”
So, while there are signs of activity and the vision for Greenwich is starting to take shape, it may take longer to emerge than its architects had hoped.
Gasometers pose burning question
An additional threat to the proposals in Greenwich has come from a somewhat unlikely source – the old Victorian gasworks.
The Greenwich peninsula site may have to be redesigned because of its proximity to a gasometer. The Health and Safety Executive has banned development within a 500ft radius of fuel holders, so one-third of the plot cannot be used for housing because of the dangers posed.
“It does have long-term implications for the development programme, but not a short-term one,” says Peter Dibsdale, English Partnerships’ area director for South London Gateway, which is working with Greenwich Peninsula Regeneration. “It does have an impact on a proposed school being built by Greenwich local authority. Residential is our biggest concern.”
Other schemes affected include major projects such as the redevelopment of Battersea Power Station and Young’s Brewery in Wandsworth.
The HSE is under pressure to moderate its stance, but at a meeting with key developers earlier this year, it refused to amend its decision.
One developer says: “It’s one of those world-gone-mad rulings.”
But Dibsdale says he is optimistic that a solution can be found in Greenwich. EP is in discussions with the owner of the gasworks to try to relocate the storage facility.
