Is the regeneration of Elephant & Castle finally on its way?
After a decade of delay, the details of the planned transformation of London SE17 still have not been agreed
There have long been plans to make Elephant & Castle as fun and welcoming a place as its name suggests it should be. But without an urgent cash injection, developers fear that the eagerly awaited tranformation of SE17 — a South London suburb known principally for its hideous shopping centre and traffic gridlock — could be set back several more years.
“We need to get extra funding,” says Christopher Allen, director of Oakmayne, a developer that has completed two buildings in SE17 and is scheduled to start work on Oakmayne Plaza in Elephant Road within six months. “We are in talks with the Homes and Communities Agency (HCA) and they are very interested in Elephant & Castle — it is the last of the major regeneration schemes in Zone One — but we haven’t got the additional funding yet.”
The problem, Allen says, is that when this particular scheme was conceived in 2006, the estimated price for properties was £550-£600 a square foot. “Now we are looking at £400-£450 a square foot. We aim to be on site by the autumn, but we will need the assistance of Southwark Council and the HCA.”
Earlier this month the HCA announced details of its proposed Private Rented Sector Initiative, a scheme to encourage institutional investors to put money into private rented housing. If the scheme goes ahead, the HCA hopes that it will help to kickstart stalled housing schemes nationwide, such as those in Elephant & Castle. For a developer — and indeed for an investor — Elephant & Castle has enormous potential. It is a short hop from Westminster, the West End and the City, and lies on two Tube lines and more than a dozen bus routes. Unfortunately this potential cannot be realised while the central area remains an enormous traffic gyratory system with a labyrinth of subways, topped off with an ugly shopping mall next to a crumbling housing estate.
Plans to change this have been around for a decade. The original regeneration plans, drawn up in the late 1990s, were abandoned in 2002 after Southwark Council and its partner at the time, Southwark Land Regeneration, failed to reach agreement. New plans were formulated in 2002 but it took the council until the summer of 2007 to choose Lend Lease as its partner. Almost two years later, the exclusivity agreement for the £1.5 billion scheme has yet to be signed — and it expires on July 1. The council says it is confident that this partnership will not collapse. Developers say that if it did, the scheme could be set back several years.
Justin Bhoday, of the estate agent Kinleigh Folkard & Hayward (KFH) in Kennington, says: “Regeneration is not happening at the pace we would have liked, but it is happening. Council tenants are being moved out of the Heygate Estate and properties are now starting to be boarded up in preparation for demolition.”
The most significant parts of the regeneration project are still a few years away: demolition of the Heygate Estate is set to happen this year and next, but the demolition of the shopping centre, construction of the new civic square and redevelopment of the Heygate site is not earmarked to begin until 2012. In the meantime, there has been some activity on the private-sector front. In addition to Oakmayne’s buildings, O-Central on Crampton Street and South Central East on Steedman Steet, Brookfield Europe’s Strata SE1, a 43-storey residential building on the site of Castle House, should be completed next year. “Strata SE1 is starting to take shape,” Bhoday says. “It is now a feature of the skyline, it is starting to tower over everything else. They certainly have not downed tools.”
For the investor with a very long-term view, Elephant & Castle remains a good bet. “A lot of people are sceptical, but I remember when I first started developing in the area near Borough Market and agents said that I was mad, that no one wanted to live around there. Now properties in the area are highly sought after,” Allen says. He points out that Elephant & Castle has a strong tradition of rental property. “More than 80 per cent of the flats we have developed in the past five years are currently let,” he says. “We remain the freeholders on the building and we know that there have been virtually no void periods.”
Prices in the area have come down significantly over the past couple of years: one-bedroom flats sold for about £275,000 in 2007 but are now selling for £215,000-£225,000. A three-bedroom house on Larcom Street — one of the better Victorian streets close to Elephant & Castle — is for sale for £310,000 with KFH. “A couple of years ago, it would have gone for £370,000,” Bhodray says.
While the regeneration scheme will eventually result in 6,000 new-build homes in the area, in the medium term the shortage of stock is likely to persist, and could help to support prices. “Elephant’s supply of housing has always been restricted,” Bhoday says. “And at the moment, people are holding on to stock — they are confident that in a few years time the area will have improved significantly, even if all the original regeneration plans do not go ahead.”
KFH: 020-7582 7773, www.kfh.co.uk
No comments:
Post a Comment