Ahead of its 15th anniversary, developer London Square has just acquired its 14th site since it was taken over by Abu Dhabi-based Aldar Development.
The London-based company targets regeneration sites in the capital, and has bought Leegate Shopping Centre site in Lewisham, south-east London, from Galliard. The site was once voted the worst shopping centre in the UK.
“That’s the point of development,” chief executive Adam Lawrence told Estates Gazette. “It’s about gentrifying, redeveloping and bringing forward these sites. We are focused on repurposing, regenerating and renewing London.”
Other people’s problems
The Leegate Shopping Centre site has planning consent for 562 homes, comprising 389 private and 173 affordable houses, with 50,000 sq ft of commercial space.
London Square is planning on amending the plans, with additional affordable housing and increased square footage. “We are not sticking with the existing consent – we are already speaking to Lewisham about the amendments we want to make,” said Lawrence.
“We are looking to optimise the development; we see that the scheme is not as efficient as it can be. And you have to be given the constraints of development today and the increased costs you must endure. More regulation regarding fire safety, two stair cores, you must be very efficient in terms of making things viable.”
London Square is sticking to the site being for-sale in the “difficult environment for build-to-rent”, the chief executive added. But although the developer has underwritten the project as a for-sale scheme, there may be opportunity to include an element of BTR to make it a mixed-use project, he added. The company is also considering introducing student accommodation in certain schemes.
“No two sites are the same and the BTR market is not quite at a place right now where the returns work given where interest rates are,” Lawrence said. “The Leegate scheme should be viable because it is a relatively affordable scheme in relation to London given the fact that Lewisham welcomes regeneration.”
The developer has continued to make acquisitions in recent months despite the sector suffering from high interest rates, land prices, construction prices and increased regulation.
“I can’t talk for other people’s problems, but I can most certainly sympathise with the fact that the ratio of cost to revenues today is as high as it has ever been,” Lawrence said. “Then you’ve got buildings that are taxed more than they’ve ever been, levied more than they’ve ever been, and are intrinsically inefficient. They are most certainly challenging and then [there is the] affordable housing that you are having to provide – many registered providers don’t have any capital to fund it.
“But I think that’s created the opportunity for us because everybody else is struggling with these issues. We would most certainly look at probably 10 sites before we [find] one that is viable.”
In the mix
Since Aldar bought the company in December 2023, London Square has acquired sites such as Ransome’s Wharf in Battersea, which will comprise 118 homes and more than 19,000 sq ft of commercial space. It also acquired County Hall, Kingston, the former home to Surrey County Council’s headquarters, which will be converted into a £250m residential-led development; and a 350-home site in the Stratford Cross regeneration masterplan from Lendlease. In Woolwich Central it bought a site that will be developed into 712 private sale homes, among others.
Lawrence attributed London Square’s success to being able to approach development through the various lenses of different tenures. He said: “As a mixed-use developer we are much more able to look at, identify and create opportunities because we understand the affordable, BTR and for-sale.”
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