One Week. 2 Schemes. More Than 2,000 London Homes Cancelled

British Land has paused work on the second phase of its giant mixed-use regeneration scheme at Canada Water in south London.

Rising construction costs and falling sales values have made residential development more and more difficult in London, and the UK’s largest REITs are pulling back on projects at an increasing clip. 

Last week, Landsec shelved the development of more than 1,700 homes on the site of a shopping centre it owns in Lewisham, south east London, saying the scheme was not viable after the local authority pulled back on support for the project. 

Canada Water is a joint venture between British Land and pension fund AustralianSuper. The projected scheme will comprise more than 4,000 homes, for both sale and rent, and more than 2.5M SF of workspace on a 53-acre site. 

About 30% of the 186 homes in the project’s first phase have been sold, Bloomberg reported last week, breaking the news of Phase 2’s deferral. The first phase also included 79 affordable homes. 

The second phase of the project is due to comprise up to 408 homes, according to a brochure from British Land. The company received approval for a revised master plan in March that allowed for increased height and massing in the residential element of the scheme. 

Phase 2 of the project was set to provide 20% affordable housing, with the project as a whole providing 9%. 

Further to the south and east, Landsec said last week it is “deprioritising” the redevelopment of its shopping centre in Lewisham into 1,744 apartments, including student accommodation and coliving units, on a 17-acre site.

The company received approval for the scheme last October from the then-Labour-controlled local authority, with 98 of the homes set for social rent and  231 to be rented out at discounted market rates or allocated for key workers.

Landsec needed the local council to agree to the compulsory purchase of properties adjacent to its holdings to complete site assembly and begin the project.

But following a change in control at local elections in May, the Green Party have said they will no longer support the CPO, which has led to Landsec shelving the project. 

Only 37% of the number of apartments needed to hit government targets are currently being built in the UK capital, according to data from Molior.