Long-awaited plans for Hammerson’s Martineau Galleries reveal just 76 affordable homes in the £1bn Birmingham city centre development.
Hammerson aims to deliver 919 homes at the site of the former 1960s shopping centre, some 20 years after it launched the redevelopment.
It has planned 728 apartments for private sale, 115 build-to-rent and 76 affordable homes across three plots.
The affordable homes comprise just 8.26% of the housing, to be delivered after the rental and private sale homes on the final plot.
The 76 homes are planned for one section of this plot, on 12 storeys sandwiched between seven private-sale homes on the mezzanine level and below 171 private-sale homes spread across a further 27 storeys.
The development programme proposes a start date for the first private sale and BTR units of June 2023, with the affordable homes due to begin on site in 2029.
Hammerson worked with CBRE and Glenn Howells Architects on viability proposals that have been registered at Birmingham City Council.
The retail developer has estimated a net development value of £1bn. It assumes costs of just over £900m for the development, with a residual profit of £100m (11% of the costs, below the identified benchmark of 20%) and £881m spent on construction based on cost plans from Gleeds.
The viability assessment says: “We therefore conclude that the proposed development is not capable of supporting additional section 106 obligation in the form of on-site affordable housing, a payment in lieu of affordable housing and any other planning gain contributions.
“However, despite the reported viability deficit the applicant is still proposing to provide 76 affordable homes, representing 8.26% affordable housing by unit.”
Birmingham City Council has a target of 35% affordable housing provision, which is subject to viability assessment and negotiation. There will be additional pressure for affordable homes on the site, given that Birmingham City Council owns the freehold and expects at-scale regenerations to support affordable housing delivery.
A Hammerson spokesman said: “As with every major planning application, the viability assessment reflects the high cost of mixed-use regeneration schemes. Affordable housing is a part of the mix of uses and our residential offer and we recognise the importance of providing affordable homes as part of the scheme.
“We are in continued dialogue with Birmingham Council to ensure the city gets the maximum investment possible for this important scheme.”
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