The UK’s largest housebuilder Barratt and Enfield Council have terminated their partnership to deliver one of London’s largest regeneration schemes at Meridian Water.
Enfield Council issued a statement saying that if Barratt would not “confirm its commitment to a number of key elements” of its bid, the partnership would be terminated. Before the agreement could be scrapped, Barratt withdrew from the arrangement.
The pair had failed to sign on a procurement process Barratt had won in May 2016.
The council claims Barratt has reneged on some promises in the development agreement for the £6bn project.
“We were simply not prepared to sign up to what we considered to be a poor deal for the residents and businesses of Enfield,” it said.
Much has also changed in London over the intervening 16 months: new mayor Sadiq Khan has increased affordable housing requirements, the EU referendum has knocked confidence, and London house prices and sales have continued to decline.
Along with many other major housebuilders, Barratt has retreated from central London, while the arrest of managing director of its London division Alastair Baird led to a change in leadership in October 2016.
The council now has a number of options on how to proceed and intends to make a statement about its preferred method of development in the coming weeks.
Should it continue with the procurement process, it is legally obliged to go to the under-bidder, Pacific Century Premium Developments and Willmott Dixon. PCPD is a Hong Kong-listed property development company, headed up by billionaire Richard Li Tzar Kai.
However, the council may also decide to go it alone, as it is allowed to do under the terms of the procurement agreement. It could then choose partners for parts or individual plots on the site.
Matters are complicated by SEGRO being a sub-developer on the Barratt bid. SEGRO and the council aim to continue its involvement, with areas of the site due to include urban logistics space, though how this works in the current procurement framework is unclear.
SEGRO said: “We are disappointed negotiations have come to an end between Barratt London and Enfield Borough Council, but we still hope to deliver the ecommerce centre which could create up to 2,000 jobs.”
A brief history of Meridian Water
Ownership and the bidding process for the 210-acre site has been long and complicated.
Enfield Council has taken very proactive role in pulling the scheme together, masterplanning and assembling the site. So far, it has pulled 64% of land into its ownership.
It started the procurement process for the 10,000 home scheme in 2014. A masterplan had already been drawn up, while the council continued the site assembly. By August 2015, a shortlist had been drawn up including Berkeley Homes, Barratt and SEGRO, Taylor Wimpey and Dorchester, PCPD and Willmott Dixon, and Peabody.
While the scheme has masterplanning, only phase one – 725 homes – has actual planning, and would be susceptible to increases in affordable housing provision.
The scheme is a dedicated opportunity area and a housing zone, and is supported by the Greater London Authority. The development will have its own new railway station, already funded and being delivered by Network Rail, planned to open in 2019.
To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette
