Far East Consortium has joined forces with Sainsbury’s to deliver a mixed-use scheme at Whitechapel Square, E1, in its first-ever partnership with a retailer.
Sainsbury’s has spent the past six years trying to gain planning permission for a large residential scheme and supermarket to replace the old buildings on the 4.62-acre site.
It initially planned a 621-flat scheme in 2014, seeking to cash in on rising residential values with the anticipated arrival of Crossrail. Plans were then downsized to 559 and later 471 flats, which were rejected by Tower Hamlets Council, with an appeal subsequently dismissed by the high court.
The partners will now go back to the drawing board to work up revised plans for a new supermarket, private sale and affordable homes, as well as public realm.
FEC as development partner will take the risk on the scheme, paying development costs including the re-provision of the supermarket.
John Connolly, head of UK development at FEC, said: “This is our first venture into the retail sector. It is one of a number of acquisitions that will be coming through in the near future.
“Retail is a distressed sector at the moment and opportunities coming to the market have strong yields. However, the main driver is the longer-term repositioning of retail and the development potential.”
The residential developer recently announced a second scheme in Canary Wharf, bringing the total development value to £750m, on top of £1bn Northern Gateway regeneration in Manchester. It also plans to expand to Birmingham.
Connolly said FEC would also explore future partnerships with Sainsbury’s.
The supermarket chain has recently ramped up its development plans for its estate, with a series of joint ventures with residential developers.
Barnet Council recently approved plans for the 1,300-flat Silk Park scheme at The Hyde in Hendon, NW9, which it is developing with Berkeley Homes.
Earlier this month, it submitted plans for a 1,161-home scheme at New Cross Gate Retail Park, SE14, in partnership with Mount Anvil and A2Dominion.
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