Developer Landsec has put its £1.5bn redevelopment of Lewisham Shopping Centre on ice after rising construction costs and a stand-off over affordable housing blocked its route to delivery.
Work had been due to start next year on the south east London scheme, replacing the 1970s mall with a new shopping district and residential towers rising to 35 storeys. The masterplan would have delivered 1,744 homes, 660 student beds and 445 co-living rooms, alongside a 500-capacity music venue and rooftop meadow.
But the developer needed council support to assemble the land, including taking control of the neighbouring former Citibank tower, Lewisham House. Lewisham’s new Green administration refused to back that next step without a significant increase in affordable housing, forcing a rethink of the consented scheme.
Landsec said higher interest rates, construction inflation and new building regulations had already made London development exceptionally challenging. The demand for more affordable homes would require a material change to its proposals.
The developer said: “This position, combined with the exceptionally difficult economic conditions, mean that we no longer see a sufficiently certain route to delivery and have taken the difficult decision to deprioritise the redevelopment of Lewisham Shopping Centre.”
Councillors backed the plans under the previous Labour administration last year, with formal approval following in July. The scheme included 98 social rent homes and 231 discounted rental homes for key workers.
Mayor of Lewisham Liam Shrivastava, who backed a campaign against the redevelopment before taking office, said the social housing offer needed to improve.
“This administration is laser focused on delivering genuinely affordable housing and I’ve consistently said the level of social rent homes in this scheme needed to increase,” he said. But he acknowledged the wider development squeeze: “The fact is the conditions for such projects are simply not favourable right now.”
Preparations for construction had already prompted Boots to relocate, while NatWest had announced plans to follow. Landsec will continue operating and investing in the existing shopping centre, which it has owned for more than 20 years.
What this means for Lewisham
The collapse of the scheme is a blow to one of the biggest regeneration projects in south east London — and to the borough’s hopes of hundreds of new homes. But the standoff underlines how hard it has become to make large schemes stack up: developers say affordable-housing demands, construction inflation and high interest rates no longer leave room for the towers-and-mall model that has defined London’s recent regeneration boom.
Residents can read more about the broader challenges facing London’s development pipeline in our report on Thames Water’s future and Wandsworth’s bridge plan row.
