Indian conglomerate the Essel Group has thrown its hat into the ring for the chance to take on the £3.5bn redevelopment of Silvertown in east London.
The 62-acre regeneration scheme was awarded to the Silvertown Partnership – a consortium consisting of Chelsfield Properties, First Base and Macquarie Capital – in 2015, but work has failed to begin due to the absence of a financial backer. It is apparently still on the hunt for an investment partner to provide around £500m for the first 2m sq ft phase of the scheme.
In March this year it emerged that Lendlease and Starwood Capital were in talks around the scheme, but now the £14bn Indian company has also said it is in the running for the site.
Led by Dr. Subhash Chandra, the group has business interests across media, entertainment, packaging, infrastructure, education, precious metals, finance and technology. It has proposed, as part of the scheme, a “major world class visitor attraction and hotel and leisure complex to celebrate India’s culture and history”.
It has drawn up CGIs of the cultural centre with HPW Architects, which occupies 14 acres at the centre of the scheme, and will include a “cultural landmark for London which will defy traditional tall build typologies”.
The 2.5m sq ft centre would include museums, a theatre, retail outlets, restaurants, a botanical garden and a luxury hotel, alongside more than 3,000 homes.
Chandra said the partnership had offered him the site after initial discussions around an India cultural centre that started in March with Sir Stuart Lipton.
He said: “They had made us [a] proposition to give us some 2.5m to 3m sq ft to be built by us. That offer was not suitable, [so] we said: ‘are you interested to give us 100% of the property?’ and they said ‘yes, make us an offer’.”
Essel released a statement on Monday saying: “A proposal has been submitted to the Greater London Authority (GLA) to purchase land from the current developers, The Silvertown Partnership, a consortium consisting of Chelsfield Properties, First Base and Macquarie Capital.”
In September 2017 it emerged that residential developers had been discreetly contacted by the GLA to explore the possibility of a new tendering process.
Essel has made an offer for the existing consent that the partnership was granted in 2016. It would be easier for a new developer to buy the existing arrangement, rather than go back the GLA for retendering, as this would require a lengthy OJEU process.
The scheme has a 2016 consent for 3,000 homes alongside 2m sq ft of commercial space. The intention has been to create a new cultural and social space alongside the new residential district, but the front loaded commercial element has been an expensive decision.
The GLA said: “The GLA is aware of Essel Group’s proposals and will respond as appropriate in due course.”
Essel Group
Essel Group started life as media and entertainment company before diversifying its business interests across packaging, infrastructure, education, precious metals, finance and technology. Chandra is reported to be India’s 19th richest man with a fortune of $5bn.
The group has existing property investments through developer Suncity in India, alongside its involvement in the Smart City initiative at Turapati in the South of the country. While Zee TV has been in the UK since 1995, this is its first foray into the UK property sphere.
Key for Chandra will be the proposed India cultural centre at the heart of the scheme. Essel is planning a “major world class visitor attraction and hotel and leisure complex to celebrate India’s culture and history”.
Chandra said: “I would not call it a property investment, it’s a destination we are creating. And the additional property is a help to my project [the Indian Cultural Centre], because we will build those houses and sell them, which will give me some equity to put up this project. And this I am doing not to make profit, its being done by a foundation called the Subash Chandra Foundation.
“The foundation has got $800m dollars, but… this project will give you $200-300m profit, which will go into this creation of an Indian cultural centre.”
The wider Essel Group – which includes five Mumbai listed companies – can also invest into the scheme.
The company has recently celebrated its 90th anniversary and Chandra said the new generation is handling much of the business, while he likes to concentrate on its social aspects.
“I am into all the social activities, I do a weekly motivational show on television for the people of India, which is watched by almost 280 million people on a weekly basis… We practice as a group, the world is one family, that is our motto as well.”
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