Landsec has shelved its £1.5bn redevelopment of Lewisham Shopping Centre after rising construction costs and disagreements over affordable housing undermined the viability of the south east London scheme.
Construction had been due to begin next year, replacing the existing 1970s shopping mall with a new retail district and residential towers reaching up to 35 storeys.
The masterplan proposed more than 1,700 homes, 660 student beds and 445 co-living rooms, alongside a 500-capacity music venue and a rooftop meadow.
However, the developer needed support from Lewisham Council to assemble the necessary land, including securing control of the neighbouring former Citibank tower, Lewisham House.
The council’s new Green administration declined to support the next stage without a substantial increase in affordable housing provision, prompting a reassessment of the consented plans.
Landsec said higher interest rates, construction inflation and new building regulations had already created exceptionally difficult conditions for development in London. Meeting the council’s demand for more affordable homes would require a material change to the 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 scheme under the previous Labour administration last year, with formal approval following in July. The approved proposals included 98 social rent homes and 231 discounted rental homes for key workers within a total of 1,744 homes.
Lewisham mayor Liam Shrivastava, who supported a campaign opposing the redevelopment before taking office, said the scheme needed to provide more social housing.
He said: “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.”
However, Shrivastava also acknowledged the difficult economic backdrop facing major development projects.
“The fact is the conditions for such projects are simply not favourable right now.”
Preparations for the redevelopment had already led Boots to relocate from the shopping centre, while NatWest had announced plans to follow.
Landsec will continue to operate and invest in the existing shopping centre, which it has owned for more than 20 years.
