“High speed” is not how many in the industry would describe the launch of London’s latest major mainline train station regeneration at Euston.
British Land was chosen as development partner for the estate in 2007, but plans were shelved in 2012 following the financial crisis and a period of indecision over whether HS2 would be given the green light. Then chancellor George Osborne unveiled a grand vision for Euston in 2014, but was put off by the cost. But with HS2 kick-starting the procurement process last week, announcing it is seeking a “master development partner” to lead the creation of a 54-acre commercial and residential district on the estate, has Euston’s moment finally arrived?
Portraits by Tom Campbell
The London to Birmingham leg of the HS2 route achieved Royal Assent in February, following a three-year parliamentary debate. The act cleared the way for the competition to regenerate the site and confirmed the government’s £55.7bn commitment to the project.
Now the government, which will own the site freehold, wants to get the property sector on board to shape and enable the grand vision.
A pre-qualification application was released last week that interested parties must submit to be considered for the next stages of the competition. Deloitte Real Estate is running the process on behalf of HS2, the Department for Transport and Network Rail.
Public-private interface
Having spent 10 years overseeing major regeneration projects such as Victoria Station for Land Securities, Tom Venner is now at the interface of the public and private sectors as commercial development director for HS2. After less than three months in the job, he faces the huge task of representing the interests of both parties. “It has mind-boggling potential,” he says of the opportunities for commercial development around HS2 stations. “And we’re just at the beginning of identifying what the potential is.”
Euston is his first priority. Dwarfed by its more impressive neighbour King’s Cross, where the surrounding 67-acre site has been regenerated by Argent, the estate is ripe for major regeneration. Camden, the local authority which will rule on development plans, has identified in its Euston Area Plan the opportunity to create up to 3,800 new homes and 3m sq ft of commercial space. Enhanced public realm and greater permeability across the estate will also be priorities.
Euston in numbers
1837 Euston opened as London’s first intercity railway terminal, operating between London and Birmingham
10 minutes Tube journey time from Euston to Mayfair, Soho, the West End, the City and Midtown
70m Number of people who use Euston station every year
2026 Year when the London to Birmingham HS2 link is expected to open
54 acres Size of the Euston Estate development opportunity
3,800 Number of new homes which could be created at Euston
3m sq ft Amount of commercial space which could be created at the station
£4bn Estimated value of the MDP contract
But Venner thinks the opportunity could be far bigger. “We want to be much more ambitious, much bolder,” he tells EG from the government-funded company’s office at Upper Woburn Place, WC1. “And that’s where I think a development partner can help us.”
Working with the stakeholders, landowners, HS2 and the local community, the master development partner’s first task will be to help maximise the development potential through input into the preparation of a masterplan. It will then work to secure necessary planning consents to enable development. In addition to the new HS2 station, a review is under way to redevelop the existing Network Rail station. A Crossrail 2 station has also been proposed for the site.
The opportunity won’t be about quick returns.
“It’s a long-term relationship,” Venner says. “This is a 25-30 year development play, and we need to be thinking about how people work today and how they live today, and how they get around. But also, how it is going to change in five years, 10 years.” Over-site development plots raised above rail infrastructure, the new HS2 station, and a potential new Network Rail station, will be released in phases, but not before 2026. The partner will then be able to secure the long leaseholds of the sites.
The timeframe could be off-putting. One chief executive of a UK development company jokes he has been asking younger people in his team if they are interested, as the project will only come to fruition after his retirement. Eiichiro Onozawa, managing director of Mitsui Fudosan UK, says: “It is a huge development, I’m aware of that. But it has such a long horizon attached to it. And there are so many elements, so many compulsory purchases. Once it clarifies, maybe we might be interested.”
But the opportunity is expected to attract interest from major UK and international developers. Sydney & London Properties with its partner Argent Related have confirmed they are looking at the opportunity. Hong Kong metro operator MTR, Canary Wharf and British Land have also been tipped as potential bidders.
The Opportunity
Overview of the master development partner role
Near term
• Help prepare Euston Station masterplan and Euston planning brief
• Secure necessary planning and other consents to enable development
Medium term
• Assist in station design and interfaces to deliver over-site development plots
• Conduct detailed planning and development above and around HS2 and Network Rail stations
• Refresh the masterplan
• Draw down individual plots for development
Long term
• Develop above and around HS2 and NR stations (subject to funding for NR station redevelopment)
• Manage the completed over site development assets
• Maintain over site development buildings and public spaces
Large pension funds and long-term investors are likely to be circling the opportunity, but the winning partner need not apply with a blank cheque. To protect the developer from investing too heavily without any short-term prospect, the partner will initially only be asked to fund a masterplan and planning applications. So, an investment partner could be brought in further down the line.
Ideal team
What would the ideal team look like to Venner? “Honestly, I don’t have an ideal team,” he says. “We took a strategic decision to bring in a partner early in this process. And we are very early, we are masterplanning now. And why did we decide to do that? Because we know that the development market can bring expertise that can help us unlock all of our regeneration objectives. How it’s done we’re totally open to. And that’s why we’ve created a flexible structure.”
“Unashamedly” they are seeking expertise, Venner says. “How can a partner create design quality? How can they bring experience of placemaking? Experience of getting planning permissions, experience of engaging with the end user. And that’s a really, really important part that we’re going to be assessing.” Local knowledge will be as valuable as international experience.
The scale of the site is both the biggest challenge and the biggest opportunity for the development partner, says Venner. “How do you piece this jigsaw puzzle together to get the most out of it for all the people that are interested? What do the local people want? What does local government want, and national government and regional government want? So, the scale is fantastic, the scale is also really difficult.”
Competition timescale
• April 2017 – procurement process launched
• Summer 2017 – more information will be released following the results of the pre-qualification application
• September – partners will be shortlisted
• Winter/early 2018 – master development partner will be selected
In addition to HS2, Network Rail and the Department for Transport, the development partner will also need to appease Camden council, the local community and the Greater London Authority. Venner insists they are united – at least behind the mission to achieve major regeneration. “I’ve been really surprised and really pleased that there’s a really good relationship and everyone wants to get this done,” he says.
“Working with Camden and the GLA will be critically important to making sure the project is right for Euston”, he adds. “We’re not a spaceship coming in to land – we are absolutely of the place… If we’re going to achieve this we’ve got to work together. But it’s got to be, you’ve got to feel like you’re in the London borough of Camden. Not like you’re in Timbuktu.”
Euston has 70m visitors every year, but people can struggle to find it. Re-opening the historic streetscape and looking at how communities can be joined up from Bloombsury in the south to Regents Park in the west and Camden to the north will be priorities.
“It sounds quite idealistic,” Venner says. “But really it’s actually fundamentally important for how this estate works.”
Walking out of Euston station a haggard father pulling a suitcase stops us and helpfully demonstrates the point. “Excuse me, can you tell me where Euston is?” Venner kindly offers directions. “You see, that’s exactly the problem.”
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