Five London football clubs want to build new stadiums, and if successful, they will open up billions of pounds of new development. Will planning connect with money to nod them into the net?
As the price of competitive football increases, more London clubs are looking to maximise the returns from their property. And if four new stadium plans come to fruition, it would represent circa £1bn of development.
Tottenham Hotspur, West Ham United, Queens Park Rangers and Brentford are all planning to relocate or develop new stadiums. These could add a total of 172,250 new seats in the capital for football fans.
Along with the £1bn the stadiums represent themselves, there is the wider regeneration potential. Value hikes in nearby properties and new development opportunities could see the wider development values soar to staggering numbers, according to some.
Sir Edward Lister, deputy mayor for planning, says: “New football stadia are to be constructed across the capital over the coming years, presenting huge opportunities for economic and social regeneration, and potentially releasing large amounts of land for future development. We are working closely with the relevant football clubs and local authorities so that we can maximise the number of new homes and jobs these schemes could deliver.”
The evidence of the regenerative power of a new stadium is already there. Arsenal’s relocation from Highbury to the 60,000-seat Emirates stadium in 2006 led to 2,500 homes being built in the surrounding north London area. Average house prices around the Emirates last year were £642,000, says Halifax bank – a 101% jump on prices 10 years ago. Colliers International says office rents in the area have increased by 12% between 1991 and 2011.
Meanwhile, Quintain continues to redevelop 44 acres of land surrounding the £750m Wembley stadium. It has already delivered London’s first designer outlet centre, a new civic centre for Brent council, plus residential and student housing. And there is more to come: offices and some 5,000 new homes form the next phases of the regeneration.
Stephen Jepson, director, sport, leisure and hospitality at Deloitte Real Estate, believes the latest raft of stadium development could trigger billions of pounds of new commercial-led space. He says: “These clubs are extremely influential in regenerating parts of London. They have the ability to encourage new developments and unlock land that could lead to the development of millions of square feet of new space.”
But regeneration is not always an easy win. Arsenal and Wembley already have their trophies, but getting to that point takes sweat and sometimes tears. Most recently, Tottenham Hotspur’s plans have hit an obstacle in the form of a local landowner unwilling to sell up to pave the way for the mega scheme.
And it is definitely a team effort. Matt Black, senior director at CBRE, advised the London Development Agency on acquiring more than £500m of land and property in relation to the Olympic Park. He says: “It is key that the sports organisations in question be central partners in any project, along with their planning authorities and developers. Failure to do so can negatively impact the organisation and the redevelopment, because it risks the team and grounds becoming an isolated entity, with any development prospects stripped away and delays to the project along with resulting budget implications.”
TOTTENHAM HOTSPUR FC
What Spurs has planning consent for a new 56,250-seat stadium, 200 flats, a 150-bedroom hotel, a club shop and a supermarket.
Funding Money will be raised by selling naming rights and bank borrowing.
GDV £400m
Regeneration potential Last year, Haringey council unveiled a masterplan centred around the stadium, which proposes demolishing property behind Tottenham High Road West to make way for a new stadium walkway, 1,650 new flats, shops, cafés, a library and cinema. The stadium is also essential to the council’s longer-term plans for the delivery of 10,000 homes and 1m sq ft of office-led employment space by 2025, which would equate to billions of pounds of new buildings.
Timeline The club says 2017 is a “feasible” delivery date, and plans to go out to tender for construction late this year.
Odds Proposals have been subject to a series of hitches, including a public inquiry, which has delayed the purchase of the remaining property needed to build the stadium. However, Haringey and the Greater London Authority are backing the club because of the need to regenerate an area that bore the brunt of the London riots in 2011.
Stephen Jepson, director, sport, leisure and hospitality at Deloitte Real Estate, says: “It is an area that has been fairly depressed and run down. With a major club planning to invest, all of a sudden land around the planned scheme becomes more desirable and of a higher value.”
Spurs chairman Daniel Levy says stadium finance plans, advised by ?NM Rothschild, are well under way. Experts say that, with government backing, the stadium will happen, but plans to deliver by 2017 ?may fall short.
QUEENS PARK RANGERS FC
What QPR has proposed a 40,000-seat stadium at Old Oak Common to replace the club’s current Loftus Road ground in Shepherd’s Bush. It will be part of a regeneration of the area, which is provisionally called New Queens Park.
Funding QPR is partnering with Stadium Capital Developments. Anthony Green & Spencer is acting for QPR on its property acquisitions.
GDV £150m
Regeneration potential Mayor of London Boris Johnson wants to transform the area with as many as 24,000 new homes and several million sq ft of employment space. Commercial space will include a 350-bedroom hotel, studios, offices, cinemas and restaurants. The regeneration will be centred around Old Oak, which would be the main hub station in the capital for the planned HS2 rail project. Subject to planning, some £24bn of new developments would be generated.
Timeline The club has now agreed a letter of collaboration with the Greater London Authority and Hammersmith & Fulham council to bring forward an early private sector investment in the Old Oak area. The club says it is confident of securing planning permission by early 2015 and starting development shortly afterwards.
Odds Other options for a relocation in west London have foundered, including a bid to buy the John Lewis distribution centre in Park Royal. With a shortage of space, QPR chairman Tony Fernandes is willing to take a punt on the regeneration zone. He says: “Loftus Road is, and always will be, a special place for the club and our supporters, but we need more than an 18,000 capacity. With no option of expanding here, we have to look elsewhere and we welcome an option to develop a new stadium at Old Oak as a key catalyst to bring forward redevelopment.” However, funding remains a concern for fans.
CHELSEA FC
Probably the toughest stadium development to crack is Chelsea’s long-held plans for a new 60,000-seat stadium.
The club was most recently linked with a 17-acre plot, Lillie Bridge in Earl’s Court, which is owned by Transport for London. However, 12 months later, no deal has been struck. It looked at Earl’s Court after losing out on a bid with its property partner Almacantar to buy the 39-acre Battersea Power Station site. Plans to expand the existing 41,798-seat Stamford Bridge are deemed unrealistic by the club, and it says a 60,000-seat stadium on its central Fulham site would cost more than £600m and the planning risks would be “insurmountable”. One source claims that no further progress is likely this year.
WEST HAM UNITED FC
What West Ham has a 99-year lease for a 60,000-seat redevelopment of the Olympic stadium in Stratford, E20. It has sold its Boleyn Ground, E13, to developer Galliard Group for a residential conversion.
Funding The sale of its 35,000-seat Upton Park home for conversion into flats will help to fund the stadium redevelopment. The revenue will help to pay down around £35m in bank debt West Ham must clear before it moves into the Olympic stadium.
GDV £150m
Regeneration potential The planned relocation has freed up land, where a 700-home village is now planned by Galliard, including leisure and retail space, to be delivered by 2018. The residential scheme is expected to be valued in excess of £200m.
Timeline West Ham expects to take up its tenancy in Stratford in 2016. Galliard expects to complete the village by late 2018.
Odds The plans have prompted a fair share of conflict, and it was only eight months ago that Leyton Orient failed to convince the high court to sanction a judicial review into the decision to award the Hammers sole tenancy of the London 2012 centrepiece. But, with West Ham selling to Galliard, it is now well under way with its stadium ambitions.
BRENTFORD FC
What The club has the green light from Hounslow council for a 20,000-seat stadium, 910 flats and a hotel.
Funding Brentford
GDV £400m
Regeneration potential Developers will watch closely how sales progress for the planned 910 flats surrounding the stadium. But with average house prices of £637,737 in the area, Brentford FC will likely help to boost prices even further.
Timeline The government rubber-stamped the plans in March, two years after Brentford bought the 7.6-acre site on Lionel Road. Completion is expected in 2016.
Odds The plans came under fire from some campaigners, who were concerned the stadium could affect the view from Kew Gardens and worried about the scale of the flats and lack of public transport. The club has now reduced the height of the residential development, asking club owner Matthew Benham to underwrite a larger funding gap in order for the scheme to go ahead. It is confident it can relocate from Griffin Park for the 2016-17 season.
joanna.bourke@estatesgazette.com
