Estates Gazette’s speed-reading guide to London’s regeneration projects in 2012. Who is doing what, how much will it cost – and what potential successes or disasters await.
STRATFORD INTERNATIONAL QUARTER
WHO Lend Lease and London & Continental Railways
HOW MUCH £1.3bn
PROGRESS IN 2012? So much, its frightening
THE STORY SO FAR The Olympic authorities granted planning permission for the 4m sq ft office scheme late last year. The development timetable suggests it could take 15 years from a start on site in 2013. Along with offices, there will be 275,000 sq ft of hotel space. The 22-acre site is next to the 500-acre Queen Elizabeth Olympic Park and Westfield’s Stratford City shopping centre.
WHAT TO LOOK OUT FOR Tenant signings. Lend Lease is very bullish about interest from “large-scale” operators. “We’re talking to commercial tenants, and looking to tie down the first of them this year,” says Lend Lease’s Mark Dickinson. Work on site will begin soon after the Games.
BATTERSEA POWER STATION
WHO Lloyds Bank and Nama
HOW MUCH £324m
PROGRESS IN 2012? If selling the site counts as progress, yes. Otherwise, no.
THE STORY SO FAR Twenty years of high hopes and low achievements culminated last month in the decision by lenders to force a sale of the 55-acre site – until then controlled by Real Estate Opportunities. Treasury Holdings paid £498m for the site in 2010 – and this year’s sale price is unlikely to match it.
The 10m sq ft masterplan already approved by planners may not survive a change of ownership. A range of parties, including Delancey, Malaysian SP Setia and US giant Blackstone, are all said to be taking an interest, as is Chelsea Football Club and Mike Hussey’s Almacantar, which envisage a 55,000-seat stadium. Knight Frank is advising on the sale for administrator Ernst & Young.
WHAT TO LOOK OUT FOR Money and chimneys. The sale process will begin this spring, and could take six months to conclude. Observers say it is difficult to imagine a price much above £200m.
Selling the site is the least of the problems, as the debate about demolition of the iconic four chimneys will intensify during 2012. Observers say Wandsworth council will be forced to abandon both the chimneys and the existing masterplan as the price for action on the long-derelict site.
No owner will want to pay up to £150m to restore four pointless chimneys, they say, but the council remains inflexible. Those approached by EG declined to comment and the council said it planned to stick to its guns and insist on high-density development. The plans for 16,000 homes and 25,000 jobs around Nine Elms make sense only if the Northern Line extension happens – and some are beginning to lose confidence in its viability.
“The trick here is to get all the landlords involved in this part of the world to work together in a coherent way,” says Jackie Sadek, chief executive of UK Regeneration.
VAUXHALL SQUARE
WHO CLS Holdings
HOW MUCH £400m
PROGRESS IN 2012? Yes, if planners like the drawings
THE STORY SO FAR Local developer CLS’s 4-acre site opposite the new Vauxhall transport interchange is earmarked for two 50-storey residential skyscrapers, 164,000 sq ft of office space, a 440-bedroom hotel, a small cinema, 38,000 sq ft of restaurants and retail, and 440 student units. Subject to receiving planning permission, the site would be developed in phases from 2014 and completed from 2017 onwards to coincide with the opening of the new US Embassy.
WHAT TO LOOK OUT FOR Wandsworth planners will pronounce on the scheme this spring. The key issue will be the effect on the London skyline and long-distance views down the Thames. GL Hearn, which is advising CLS, seems confident about this.
The bigger problem may turn out to be the triple whammy of section 106 payments, the compulsory levy for local infrastructure improvements, and the Crossrail payment, which is £3m alone.
Delicacy also surrounds sitting tenant Cap Gemini, whose 50,000 sq ft office could anchor the project. Unusually in the Nine Elms/Battersea area, the scheme’s commercial logic does not depend on the Northern Line extension.
WEMBLEY STADIUM
WHO Quintain
HOW MUCH £2.5bn
PROGRESS IN 2012? Going for gold
THE STORY SO FAR Quintain is transforming the 85-acre site around Wembley Stadium and Arena, which, on completion, will comprise 8m sq ft of retail, commercial, leisure and residential space, including more than 5,000 homes. Planning consent was granted in 2011 for a further 1.7m sq ft of development on the North West Lands. At the 300,000 sq ft London Designer Outlet, Marks & Spencer, Gap and Nike have signed up and contracts accounting for 45% of the rent have been exchanged or are in solicitors’ hands.
WHAT TO LOOK OUT FOR More prelets and a funding partner. Quintain refuses to go public on the price of buying into the LDO. With prelets rolling in and more to come, signing a jv partner ought to be easy, but talks have so far led to nothing.
Work on site will be completed by 2013.
EARLS COURT
WHO Capital & Counties
HOW MUCH £8bn
PROGRESS IN 2012? Maybe
THE STORY SO FAR Sir Terry Farrell’s plans for four villages on a 70-acre Earls Court site are now making their way through the planning process. Around 7,500 homes are envisaged and more than 11m sq ft of floorspace planned. The first phase, on 7.5 acres at Seagrave Road, secured an investor late last year when CapCo sold a 50% stake to the Kwok family of Hong Kong for £65.6m.
WHAT TO LOOK OUT FOR Seagrave Road, which could begin some time after the Olympics, offers the greatest hope of action. Top of the list of problems are angry locals, unhappy about being rehoused. CapCo and its team “have managed to antagonise the locals in rather a stylish way”, according to one senior observer, and court hearings are looming.
Sir Terry’s Four Villages and a High Street masterplan for the rest of the site has been criticised by Greater London Authority planners, who say it fails to meet their guidelines in 44 different ways.
“There’s funding in place, there’s a market for the product and they will get planning, so there is no reason for cynicism,” says one supporter.
A detailed planning application for the 1m sq ft Seagrave Road site was submitted in June 2011.
WEMBLEY CENTRAL
WHO St Modwen
HOW MUCH £90m
PROGRESS IN 2012? Yes, if the concrete is up to it
THE STORY SO FAR Earlier phases of the regeneration scheme delivered a public square, 23,000 sq ft of office space at Ramsey House, Central Apartments – a development of 155 private flats, of which only five are still available – and 85 affordable homes.
WHAT COMES NEXT Brent planners are pondering changes proposed late last year by St Modwen. The developer thought better of its 2005 plans and has now junked proposals for a health club and more flats, replacing them with an 86-bedroom (35,000 sq ft) Travelodge, 38 private flats and an improved entrance to Wembley Central station.
Subject to planning consent, St Modwen aims to start construction on the five-floor 102,000 sq ft project in the first half of 2012, with the final phase of shops and the hotel trading by 2013.
WHAT TO LOOK OUT FOR It is not easy to develop over railway lines. The raft over the railway was built in the 1960s and replacing a three-storey block with a five-storey block means extra weight. Can the 40-year-old piles cope? St Modwen certainly hope so and is now at stage two of a three-stage process designed to prove its point.
A contractor will be chosen this summer, at which point the piles become its problem. In the event that the piles cannot cope, St Modwen is likely to slice a few floors off the top to cut the loading.
WANDSWORTH SOUTH SIDE
WHO Delancey and Land Securities
HOW MUCH £50m
PROGRESS IN 2012? Definitely
THE STORY SO FAR Wandsworth’s humble Arndale Centre is being reborn as the more swanky Southside shopping centre. Permission has already been granted for a 33,000 sq ft retail and restaurant extension overlooking Garratt Lane, and prelets secured at the tail end of 2011 brought the development to 50% let or in solicitors’ hands.
Work on site begins this spring. An application has now been submitted for a £41m redevelopment of the old Arndale Walk, to include a 70,000 sq ft department store and seven shops. Work on site could begin this summer.
WHAT TO LOOK OUT FOR A department store signing is said to be imminent. Wandsworth planners are expected to smile on the scheme, with planning consent agreed by April. The hard work of reviving and improving the tenant mix continues.
ELEPHANT & CASTLE
WHO Lend Lease
HOW MUCH £1.5bn
PROGRESS IN 2012 Yes and no
THE STORY SO FAR The redevelopment of the Heygate estate promises 2,800 homes, 50,000 sq ft of office space and 165,000 sq ft of retail. A 13-year construction programme is due to begin in spring 2013. This is part of a wider Southwark council initiative for 300 acres around the Elephant. It includes 4.7m sq ft of development, comprising almost 500,000 sq ft of shops, 4,000 homes and 323,000 sq ft of offices. St Modwen is pencilled in for the redevelopment of the shopping centre, while a series of high-rise residential plans are also envisaged.
WHAT TO LOOK OUT FOR It is all about planning. The big noise will continue to be James Palumbo’s efforts to stop large-scale residential development next to his Ministry of Sound nightclub. He failed to stop Neobrand’s 22-storey plan but successfully halted Oakmayne’s 43-storey plan. However, with mayor Boris Johnson intervening, the Oakmayne battle is not over.
Lend Lease might face some planning battles of its own: residents objected to losing trees and the plans are being revised to keep more greenery.
The wider regeneration wins universal praise – it could become the King’s Cross of south London, say some.
LEWISHAM GATEWAY
WHO Muse and Taylor Wimpey
HOW MUCH £250m
PROGRESS IN 2012? Don’t hold your breath
THE STORY SO FAR The realignment of a roundabout and improvements to pedestrian access are vital at this technically tricky 13-acre site.
The idea is to link rail, bus and DLR interchanges to the town centre, and there is outline permission dating from 2007 for 150,000 sq ft of shops, 80,000 sq ft of leisure and 800 homes.
Last year, Lewisham council gave the developers until 2013 to sort out the problems and get started on site. Work on site could begin in 2014, say developers.
WHAT TO LOOK OUT FOR Eight years since the developers were chosen, and still no sign of those houses and shops.
“Work is ongoing with the public sector to discuss the form of the reserved matters application with space that could potentially be used by Lewisham College and as a healthcare centre,” say the developers, adding hopefully that the first homes will be ready by 2015.
Work on site had been expected to start this year, but with funding issues unresolved it seems unlikely. The developers say in a statement: “A firm commitment has been made by both development partners and the public sector bodies to the long-term future of the project, with the process for funding to be started at a later date.”
GREENWICH PENINSULA
WHO Quintain and Lend Lease
HOW MUCH £5bn
PROGRESS IN 2012? Yes
THE STORY SO FAR The 190-acre site around the O2 stadium is a monster project by any standard. It will include 14m sq ft of floorspace, including 3.5m sq ft of offices and around 10,000 homes. The first residents moved in last year and Mitre Passage, the 115,000 sq ft first commercial element, has begun to attract occupiers; most recently, 10,500 sq ft was let to serviced office provider i2.
WHAT TO LOOK OUT FOR Quintain is working on two residential plots at Peninsula Quays, a 3,000-home site overlooking Canary Wharf. Detailed planning permission should arrive soon, and a start on site is expected. Meanwhile, Mitre Passage will see more deals.
Mark Dickinson, commercial director at Lend Lease, says that they are working on getting another five sites through the planning system.
