Throughout Britain a trend has started that finds residential property developers taking over failing shopping centres to repurpose for new and much needed housing. Other developers are looking to buy and redevelop warehouse space for housing and other uses.
A new tall buildings development has just been granted permission on the well known Old Kent Road in Southwark in a report by the South London Press (SLP). The £600 million scheme is set to provide 1,113 new homes and bring 521 new jobs. The plans call for an extension of the Bakerloo line and improved routes for cyclists and pedestrians. The area known as 'The Ruby Triangle' is also raising concerns by locals over the amount of affordable housing and industrial space. An earlier project for a £520 million skyscraper was approved for the area last year. The plans are to remove the Cantium retail park currently on the site for the new home development.
Old Kent Road
It is reported that the plans will have 363 or 36% of total new homes being affordable, 237 social rented and 126 shared ownership homes. Only 16% of the homes to be built and approved by the planning committee will have three bedrooms and three homes that will accommodate four bedrooms.
A 48-storey residential tower block that will be the fourth tallest in London with other buildings at 37-stories.
Southwark planning officers told the SLP:
“The applicant has agreed to consider whether there is scope for more larger affordable units to be provided and a condition has been included to secure this.”
Residents fear that the Grade-II listed Canal Grove buildings will be overshadowed by the new buildings and have a negative impact on the area.
A Canal Grove resident told the SLP:
“While we have received assurances that this particular development will not directly overshadow us, the cumulative impact of these developments will substantially affect us and does notaddress local housing needs."
“We know there is a housing crisis and that the money from developers has knocked the sharp edges off austerity for the council, but we lament the loss of industry and jobs andquestion if this is the best and only solution.”
Other concerns raised were from the community group Vital Old Kent Road who complain of the potential loss of 40,000 square feet of retail space that have the potential of hurting retailers B&Q and Halfords.
In the SLP Mark Brearley:
“This scheme highlights the parallel failure toaccommodate retail businesses. Officers are recommending approval of a scheme that would reduce retail floor space byaround 40,000 sq ft, pushing out B&Q who have made clear that they do not want to leave."
“But we should shout back that 50 jobs here, 60 jobs there, should not be belittled, thrown away lightly, after all that’s peoples’ livelihoods and their self-respect.”
In response the Southwark planning officers say:
“Officers have been working with the applicant to ensure B&Q would be offered part ofthe destination space. B&Q would be offered first refusal on the destination space,at normal market rates. The plan makes provision for 437sq m of potential space for B&Q.”
It is expected that the buildings will take up to six years to complete by Aviva Investors and Galliard Homes.
Helen Rainsford, senior director at Aviva Investors, tells SLP:
“Aviva Investors is pleased planning consent has beengranted for the regeneration of Cantium Retail Park. Working with Galliard Homes, we believe we can create a superb residential-led mixed-use development that willtransform the site for the benefit of the local area.”
Stephen Conway, executive chairman of Galliard Homes:
“The regeneration of Cantium Retail Park will serve to kick-start the wider planned regeneration andtransformation of the entire Old Kent Road into a vibrantnew high quality commercial, retail and residential destination for South London.”
One other development is the Bargate shopping centre in Southampton that was built in the 1980's but by 2013 the shopping centre which featured a Sega Park video games arcade was derelict and out of business. The financial Times (FT) reports that the new £100 million project will have about one half of the present retail space and 152 flats with accommodations for 451 students.
In an interview with the FT James Burchell, a partner at Tellon Capital says:
“It was a dead-end centre in every sense of the word."
“We are creating a thoroughfare with a new sense of place — not just a shopping centre.”
In a recent review by the consulting firm CACI the retail centres for England and Wales depending on demand 49% of the retail centres have more space than what is needed.
Mark Robinson, President of Revo tells the FT:
“For all my working life retail has been the most valuable use [of land] on a per square foot basis, but that is no longer always the case.”
The industrial real estate asset manager M7 has established a £70 million fund to purchase retail warehouses for future repurposing should the retail market demand decline.
Richard Croft the chief executive of M7 :
"The thinking behind it is very simple: [logistics] warehousing is now the most popular asset class in the world, while retail warehousing is about as popular as the Ebola virus."
“We are able to buy these things at very attractive yields [because of] the perception that the retail market is going to collapse."