35% Campaign update – Elephant Park MP5 – the final chapter

Elephant Park MP5 – the final chapter

Aug 05, 2019 12:00 am

Final phase of Heygate redevelopment proposes increase in homes with decrease in affordable -Developer Lendlease has applied to build 220 more homes than consented while providing 29 fewer affordable homes than consented in the last phase of its redevelopment of the Heygate estate. This will bring the total number of homes to 2,689 of which just 92 social rent without the viability review envisaged in the original planning consent.

In its recently submitted detailed planning application for the last plot of the scheme (MP5/H7) for what is now known as Elephant Park, Lendlease proposes building 424 new homes. There would be 72 affordable units, made up of 37 shared-ownership, 20 affordable rent and 15 social rent.

This would take the total number of social rented units in the development to just 92 out of 2,689 in total, a figure that has crept up from 71 units since 2013 (plus a further eight on Trafalgar Place (Heygate Phase 1)). The overall affordable housing is broken down into 92 social rented, 167 affordable rent and 282 shared ownership.

 Figures for the total and affordable units proposed in planning documents for MP5, the final phase of the development

Lendlease now proposes that the completed development will total 2,689 homes. This is 220 more homes than the numbers agreed by the planning committee in January 2013, which agreed a development of between 2,300 (min) and 2,469 homes (max).

 Development description from planning committee report for outline consent, Jan 2013

While the number of homes proposed exceeds the number consented, Lendlease proposes a reduction in the number of affordable homes. Only 541 of the 2,689 homes will be affordable, 29 fewer than the indicative figure of 570 given to the planning committee in 2013.

The figure for the 570 approved affordable homes was given on page 9 of the 2013 planning committee’s addendum report (correcting a previous figure of 574).

Table 8.1 of the recently submitted Reconciliation Statement for the MP5 reserved matters application shows that only 541 affordable homes are now proposed overall.

 Extract from the addendum to the 2013 outline planning committee report

 Extract from Lendlease’s recently submitted application

Southwark fail to secure housing numbers

The increase from 2,469 to 2,689 total units on Elephant Park has been facilitated by an amendment to the original planning permission. This was made in November 2018 and changed the way the amount of residential space was calculated by replacing the minimum and maximum figures for residential units with floorspace figures. The floorspace figures remained the same as those approved by the planning committee (160,579sqm GEA {min} and 254,400sqm GEA {max}), but by removing the unit figures the amendment enables Lendlease to build more homes within the allowed floorspace.

It also transpires that the number of units to be built were not secured in the original planning permission, thus opening the door to the amendment, which was deemed ‘non-material’ and so was approved by officers and not referred to the planning committee.

Policy compliance

While Lendlease has not delivered the number of affordable homes expected by the planning committee, they are nonetheless able to say they are fulfilling the affordable housing obligation of 25% affordable housing. This is because the amount of affordable housing is measured as a percentage of habitable rooms, not units. The officer’s report to the planning committee noted that there were a relatively high proportion of larger affordable units. These are undoubtedly welcome, but do mean that there is just 20% affordable housing when measured by units.

Viability questions

At the time of the application’s original determination in 2013, a viability review was proposed in the event that the development was delayed, or a change of circumstances occured. No such viability review has occured to take into account Lendlease’s proposed increase in density or reduction of affordable units.

 Extract from the 2013 planning committee report

The increase in maximum units to 2,689 units with the 29 unit drop in affordable housing gives Lendlease about 190 more free-market homes than the planning committee was led to believe would be built. These have a rough estimated value of £80m, a figure that obviously cannot have featured in the 2012 viability assessment. This assessment was made on the basis of 2,462 units and concluded that the scheme could not provide 35% affordable housing and that only a very small fraction could be social rented.

No public funding?

The lack of available public funding was cited in the officer’s report as a factor that diminished the chances of a viable scheme delivering 35% affordable housing, when the application was originally considered.

This came with the reassurance that should public funding become available the affordable housing situation could be improved. There is no indication that this has happened through the duration of Elephant Park’s development, despite the Mayor Sadiq Khan having £4.6bn in his kitty.

Object to MP5 – fight for 84 more affordable homes

Lendlease’s detailed MP5 H7 application is almost the final chapter in the redevelopment of the Heygate estate and it allows us to evaluate what is being delivered, against what was said and what was approved by Southwark Council, back in 2013.

It is now apparent that while Lendlease will fulfil its reduced affordable housing obligation they intend to do so by delivering fewer affordable homes. Lendlease has also been granted a change in the permission that has allowed them to build many more units. The upshot is that Lendlease has about 190 more free-market homes to sell.

Southwark, on the other hand, has neglected to secure the number of homes to be built and is giving Lendlease the opportunity to build more, without getting any improvement in the affordable housing situation. There also appears to have been no effort to take advantage of any public funding.

This final Heygate application must be decided by the planning committee, not officers alone. It must ask why we are getting fewer affordable housing units than it was told to expect, while Lendlease are being allowed to build more units in total. The committee must also ask why there have been no viability reviews since 2013 and what has been done to improve the affordable housing.

Without a viability review, the planning committee must refuse planning permission. The very least Lendlease should do is increase the total number of affordable homes, back to the indicative 570 the planning committee approved, plus 25% of the additional 220 units it has gained over the original maximum build. This would give us a much-needed 84 affordable homes and half of these must be social rented, as Southwark’s housing policy requires.

You can object by clicking here or filling in the form below:

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Comment: Dear Southwark Planning, This application (19/AP/1166) is pursuant to the outline planning permission granted to developer Lendlease for the redevelopment of the Heygate estate (12/AP/1092). This entailed an obligation to build 25% affordable housing. It is now apparent that while Lendlease will fulfil its affordable housing obligation they intend to do so by delivering fewer affordable homes than the planning committee were told would be delivered when they gave approval for the redevelopment. The committee was told there would be 570 affordable homes, while Lendlease now proposes to deliver only 541. Since permission was given Lendlease has also been granted a change to that permission that will allow them to build 220 more units than the original maximum. Southwark, on the other hand, has neglected to secure the number of homes to be built and gave Lendlease the opportunity to build more, without getting any improvement in the affordable housing situation. There also appears to have been no effort to take advantage of any public funding. This final Heygate application must be decided by the planning committee, not officers alone. It must ask why we are getting fewer affordable housing units than it was told to expect, while Lendlease were allowed to build more units in total. The committee must also ask why there have been no viability assessments or reviews since 2013 and what has been done to improve the affordable housing. There should be a viability review in order to reflect the increase in density and the planning committee must refuse planning permission, unless Lendlease increases the total number of affordable homes, back to the indicative 570 the planning committee approved, plus 25% of the additional 220 units it has gained over the original maximum build. This would give us a much-needed 84 affordable homes and half of these must be social rented, as Southwark’s planning policy requires. Yours sincerely,

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Shopping centre legal challenge next week!

Dear Friend

The hearing for our challenge to the shopping centre planning approval is just over a week away.

We will be holding a rally in support of the challenge on –
Wednesday 17 July 2019 –
9am – 10am, outside the Royal Courts of Justice
the Strand
London WC2A 2LL

The case will be then heard from 10am – it is open to the public, so all are welcome to attend!

We are fighting this case to get more social housing and a better deal for the traders at the Elephant. To do this we must first overturn developer Delancey’s gentrifying plans – that is why we are going to court.

Thanks to your help we have raised nearly £8,000 through our CrowdJustice appeal (donations still welcome!) and we have a great legal team.

But we need your support at the hearing too, to show Delancey that the local community is fed up and angry with bullying developers. You can read more here and, for Spanish, here.

So please join us on the Wednesday 17 July!



Copyright © 2019 Elephant Amenity Network, All rights reserved.

Our mailing address is:

Elephant Amenity Network

18 Market Place
Blue Anchor Lane

LondonSouthwark SE16 3UQ

United Kingdom

35% Campaign update – Why we’re challenging the Elephant & Castle redevelopment plans in court

Jul 03, 2019 12:00 am

Southwark Council – demolishing council homes, generating better people

Twenty years ago, Fred Manson, Southwark Council’s Director of Regeneration laid out the aims of the Labour council’s new regeneration strategy in industry magazine, the Estates Gazette: “We need to have a wider range of people living in the borough” because “social housing generates people on low incomes coming in and that generates poor school performances, middle-class people stay away.” As the Gazette reported it, this was “part of a deliberate process of gentrification that will result in social housing being replaced by owner occupied dwellings and developers being given free rein to build luxury flats” 1.

Since Mr Manson’s 1999 anti-council housing manifesto, the borough has lost more than 13,000 council homes (see graph below) and the proportion of council housing had fallen from 60% of to 28% of housing stock by 2015. This is mainly the consequence of Right to Buy and void sales.

But council estate regeneration, Manson style, is also playing its part. The Gazette article mentions three estates south of Tower Bridge earmarked for demolition. At least eight others can be added, totalling 7,639 council homes and leasehold properties lost. The developments replacing these will provide over 11,000 new homes, but only 3,200 of them will be social rented and while Southwark does now have an council house building programme, it is still knocking down and selling off council homes faster than it is building them.

The proportion of social rented housing is even lower when other major schemes are considered. Analysis of the major schemes approved by Southwark over the last 15 years gives an average social rent component of under 4% out of about twelve thousand homes – well below the Council’s policy requirement of 25%. (Recent approvals of Old Kent Rd developments increase the overall percentage to 10%).

Nearly a thousand new homes, 116 social rented – (maybe)

The Elephant and Castle shopping centre redevelopment is no exception in this regard. A stone’s throw from the demolished Heygate estate, only 116 of nearly a thousand new homes will be offered as social rent (8.6% by floorspace), all to be built nearly ten years hence. Shopping centre owner and ‘specialist real estate investment and advisory company developer’ Delanceysaid that this was as much as it could afford to build, but we now know that with Mayor’s funding they could give us another 42 homes – still a modest amount, but almost enough to reach Southwark’s local plan requirement.

Whether there will ever be even 116 social rent units is also open to doubt. Leaving aside the fact that they won’t be built for nearly ten years, a long time by any measure, Delancey has the option of passing the obligation to build the homes back to Southwark, along with land and ‘sufficient funds’ to fulfil the obligation. We fear that the wording of the development’s legal agreement fails to properly secure this. We also believe that the wording of the legal agreement fails to provide an effective viability review mechanism – a basic policy requirement and a way to get greater affordable and social rent housing, should the development prove more profitable than expected.

As well as housing, the new development will provide about the same amount of retail space as there is in the present shopping centre, but catering for the more well-heeled customer other social-rent free developments are now drawing to the Elephant. The shopping centre itself will be demolished, which will destroy not just the shops of the many independent traders who have made the Elephant their home, including many ethnic businesses, but one of two major social hubs for the Latin American community in London (the other, in Seven Sisters, is under similar threat).

Concerted campaigning has gained some space for these traders in the shopping centre and other new developments, as well as a temporary relocation facility, but there is not enough space for every trader who wants it.Latin Elephant, a local charity and advocate for all ethnic traders in the area, reckons there are nearly a hundred independent traders in the area and, given the practicalities of moving a business and a limited relocation fund of£634,700 only a fraction of traders are likely to benefit.

Delancey’s anticipated profit from all of this is £137m or £148m, according to the last available viability assessments and depending on the grant funding situation. Delancey developments, at the Elephant, are based in off-shore tax-havens, with the shopping centre development registered in the British Virgin Islands.

We must have homes that meet local need

Delancey and Southwark argue that other elements of the scheme – a new Northern Line tube entrance and a campus for the University of the Art’s London College of Communication – provide positives that outweigh any negatives in the housing and retail offer. This is entirely in keeping with the regeneration rationale, as articulated by Fred Manson back in 1999, so successfully implemented by Southwark since then and now making a sizeable contribution to London’s disastrous housing situation – thousands of new homes that many, not just of the poorest, cannot afford to either rent or buy; housing costs for the poorest the ‘worst in Europe’ and a record number of rough sleepers.

From the moment the shopping centre planning application was made over two years ago, Southwark Council has been content to take whatever Delancey has offered, regardless of local need, in pursuit of its wretched gentrification agenda. It has been local campaigners, with the support of some local councillors, who have fought hard over the past two years to squeeze housing concessions and a better deal for shopping centre traders out of the development. We must now fully secure the maximum social rented housing, and not have to wait nearly ten years for them. 42 extra social rented homes are not that many, the London Mayor has the money to pay for them and we are determined that they should be built. We also want a better deal for traders – more space and more money for relocating.

That is why we are challenging Delancey’s planning permission through the High Court. We want the permission quashed and then we want a development scheme at the Elephant and Castle that provides homes and shops that are truly affordable for local people.

If you agree with us, you can help in this fight by donating here or coming to support us at the High Court on Wednesday 17th July.


  1. Estates Gazzette article published 13 March 1999 

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35% Campaign update – Verney Rd – yet another Old Kent Rd development

Latest blog update on regeneration in Southwark.
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Verney Rd – yet another Old Kent Rd development

Jun 16, 2019 12:00 am

Third large application in a month goes to committee -The application for a mixed-use development at 6-12 Verney Rd, just off the Old Kent Rd, behind PC World, is due to be considered by Southwark’s planning committee this Monday (18 June). The proposal is for 3 blocks, the tallest of 17 storeys, comprising 338 residential units, office and workspace and associated open, green and amenity spaces. The application is recommended for approval.

The application follows Malt St, approved less than two weeks ago, Southernwood Retail ParkCantium Retail Park and Ruby Triangle and is the latest of the big developments being rushed through planning committee, in advance of the adoption of the Old Kent Rd Area Action Plan (AAAP.

Verney Rd shares several characteristics with the other Old Kent Rd developments, although somewhat smaller. All have 35% affordable housing, in an approximate 70:30 social rent:intermediate housing split, compliant with the local plan (Ruby Triangle and Malt St have 40% affordable housing). All, though, are technically non-viable, according to their viability assessments, so should be unable, in theory, to meet this affordable housing requirement.

Developer’s estimate of profit shortfall for Verney Rd scheme.

Viability rules?

This contradiction is reducing the consideration of viability into something of a ritual. The developer (in this case CB Acquisition London Ltd, (correspondance address, Cayman Islands)) says that the scheme will only make about half the profit needed to support the affordable housing required and the Council’s appraiser broadly agrees, with some caveats. Then, after ‘stand-back analysis’ or ‘sensitivity testing’ (and with the Bakerloo Line Extension (BLE) very much in mind) the developer graciously agrees to deliver the affordable housing, regardless.

Extract from developer’s viability assessment

This is different to what has been happening at the Elephant and Castle, where every major development used viability to refuse to deliver policy compliant affordable housing, so it must count as progress – but maybe not as much progress as it first appears.

Homes and jobs

Verney Rd is designated in the Mayor’s planning policy as a Strategic Industrial Location. Southwark Council and the Mayor have agreed to the release of such land for mixed use development, including housing, before the Old Kent Rd AAP has been adopted, much to the anger of the many Old Kent Rd businesses.

Such developments, where the industrial land is lost, should provide 50% affordable housing, according the Mayor’s draft New London Plan. This was the case for Ruby Triangle and Malt St, as well as Verney Rd. The draft NLP is not yet adopted, so developers are getting in quick, before it takes full force.

Second, while CB Acquisition Ltd are offering 35% affordable housing, they want any improvement in viability to ‘be used to bridge the current viability “gap” rather than for further planning obligations’ (ie affordable housing). This pre-empts the use of a late review mechanism, designed to capture any uplift in profits for affordable housing when the development is complete. (Malt St was passed without a late stage review mechanism, though both Ruby Triangle andCantium Retail Park have them).

Denser and denser

On top of this Verney Rd is a very dense development – 1180 habitable rooms per hectare – way above the London Plan range of 200-700 habitable rooms per hectare (hrh) for an Urban Density Zone. But even Verney Rd is not as dense as Ruby Triangle (2713 hrh) and Cantium and Southernwood Retail Parks (2353 hrh and 2522 hrh respectively), rendering the London Plan policy a dead letter, as far as the Old Kent Rd is concerned. Together the developments will deliver over 4,600 homes, with a gross development value above £2bn, with the potential for a big impact on profitability from any marginal improvements in the viability figures.

All the Old Kent Rd developers have shown a marked reluctance to take advantage of the grant funding available from the Mayor – only Ruby Triangle and Malt St have done so and then only for 5% of the affordable housing. As the Southernwood Retail Park developer explains it, grant funding would have‘a significant negative impact on the viability of the scheme’.

More or less affordable housing?

So, the picture that emerges is that of a pact being struck – developers will deliver the affordable housing that the local plan requires, but not much more, regardless of the true profitability of the developments and of any ‘strategic’ target of 50% affordable housing, set by the Mayor. On the other hand, should, say, problems occur with the BLE, reducing the prices that can be charged for new homes, it is not hard to envisage developers returning to Southwark, reminding them that they always said their schemes were technically unviable, and looking for a reduction in the affordable housing.

Indeed, this eventuality is even envisaged in the proposed small print of the planning consent.

Paragraph 256 of the planning committee report.

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Delays and Delancey

Jun 15, 2019 12:00 am

Delancey looks to escape blame for its own faults –

In the face of a judicial review of their planning approval for the shopping centre demolition and redevelopment (now scheduled for 17 and 18 August), centre owners and developer Delancey showed a touching concern for the welfare of the traders, making noises about how the ‘timeline for starting on site will be pushed back’, affecting the traders’ hopes for ‘stability and certainty’.

Delancey has not previously been in any hurry to settle the centre’s future, other than entirely on its own terms. This is amply demonstrated by the snail’s pace progress of their planning application. It is a story of constant deferment, caused by Delancey’s refusal to meet the minimum requirements of the Council’s own local plan.

Delancey are culpable in 3 areas – the affordable retail offer, the relocation of the traders and the affordable housing offer.

No affordable retail

The application was lodged on the 28 October 2016 but did not include any affordable retail units, contrary to Southwark’s 10% requirement. Instead Delancey submitted a Retail Assessment which said ‘The Proposals do not include 10% affordable retail for the reasons outlined later. This would be unviable and inappropriate given the intention to create a strong retail/leisure anchor at the heart of the town centre’ (4.63).

By Dec 2017 the affordable retail offer had inched up to the equivalent of 5.3%(para 88), including an in-lieu payment. The application was scheduled for a planning meeting on 18 Dec 2017, when Delancey, no doubt fearing a refusal, despite a recommendation to approve (para 1) asked for a deferral ‘to allow time for further negotiations in relation to the affordable retail proposal’ (para 2) . A fully policy compliant offer was not made until Jan 2018 – 15 months after the application was first made.

No relocation strategy

The relocation of shopping centre traders was even further down the list of Delancey’s priorities. A draft strategy, put together without any input from traders, appeared in August 2017, nearly a year after the planning application. The strategy did not include anywhere for the traders to move to during the building of the new development. This would have to wait another 5 months, until February 2018, when the Castle Square temporary facility for traders was proposed.The planning application for this wholly inadequate temporary space was made in June 2018, with approval in January 2019.

No social rented housing

Alongside this, similar delays plagued the affordable housing offer, which Delancey only slowly and reluctantly improved because of fierce campaigning opposition. It took Delancey over 2 years (Oct 2016 – Dec 2018) to progress from their initial offer to the final, approved proposal, while still falling short of the social rented housing requirement.

There was a complete absence of social rented housing, or quantities for any kind of affordable housing in the initial offer. Delancey would only say that 35% affordable housing would be between 15% and 80% market rent, with a‘blended percentage’ of 57% (Para 6.3). This turned out to include a only a meagre 33 ‘social rent equivalents’, out of 979 total units. This went up to 74 units in February 2018, with 95 London Living Rent units and 161 affordable rent at 80% market rent. Five months later, in June 2018, the social rent was increased to 116 units, (with the promise that they would be ‘proper’ social rent), but the London Living Rent was reduced to 53 units to compensate, with 161 units remaining at 80% market rent (income thresholds of £80,000-£90,000 pa). This was too much for Mayor Sadiq Kahn who insisted on a top threshold of £60,000 pa.

Three deferrals

Delancey’s foot-dragging caused the application to be deferred three times (18 Dec 2017, 16 Jan 2018, 30 Jan 2018), while the planning committee, under intense pressure from campaigners, wrestled improvements into Delancey’s scheme, until final approval on 3 July 2018.

This entailed 4 versions of an expanding officer’s report, which recapped the reasons for each successive delay and recounted the improvements wrenched from a reluctant Delancey. Each version recommended approval, on the basis that the deal offered, including affordable retail, trader relocation and the ‘maximum reasonable amount of affordable housing’ was the best that could be got, only for the next version to demonstrate that this was not the case.

Castle Square

The delays did not end with the planning committee approval. Planning approval was also needed for the Castle Square temporary facility, as a condition of the shopping centre development approval. While the proposal was made in February 2018, Delancey came forward with this application at the end of June and it went to committee on 7 Jan 2019. The final decision notice for the shopping centre application was then published on 10 Jan 2019, nearly a full year on and there hasn’t been any progress since then.

Castle Square showing no sign of works commencing on the temporary boxpark

Where the fault lies…

It might be argued that through this whole tortuous saga that Delancey ‘listening’ and responding to the community’s concerns. An alternative explanation is that it is a well-rehearsed developer tactic- offer as little as you can get away with, and then make only those improvements you are forced to concede. Delaying the delivery of the hard-one 116 social rented units for at least 9 years employs the same delaying tactic.

To sum up, we have little doubt that had Delancey presented the improved scheme that it presented to the planning committee on 3 July 2019 at the very first scheduled planning committee meeting, back on 18 December 2017, it would have been approved and any legal challenge long resolved. Delancey could then have saved the crocodile tears it is currently shedding on behalf of the traders. hi sweetie I am

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35% Campaign update – Malt Street – the next big Old Kent Road development

Malt Street – the next big Old Kent Road development

Jun 01, 2019 12:00 am

Big questions for Berkeley Homes still unanswered –

Southwark’s planning committee is to consider yet another major Old Kent Rd development on Monday, the fourth so far, after Ruby Triangle, Cantium Retail park and Southernwood Retail Park. Southernwood was unanimously approved by Southwark’s planning committee just last week, despite objections, including doubts about whether it that it will deliver the maximum reaonable amount of affordable housing. Serious concerns raised about the impact of the scheme on the proposed Bakerloo Line Extension (BLE), were allayed by a last minute letter to the Council from Transport for London (TfL).

For Malt St, Berkeley Homes proposes a mixed use development, including 1,300 homes and 7,000 sqm of commercial space, on 1.9 hectares of land behind Asda. It is a ‘hybrid’ application of two parts, a detailed application for 420 homes, and an outline application for 880 homes. The total development comprises 11 blocks, including 39 and 44 storey towers, to be built in three phases, with completion by 2027.

Berkeley Homes are offering 40% affordable housing in total across the whole scheme, with the detailed part of the scheme providing 83 social rented and 48 intermediate units, but leaving the exact number of affordable units provided by the outline part of the scheme to be determined later.

Taking the ‘social’ out of social rent?

As stated in the planning committee report, Berkeley propose 35% affordable housing, of which 25% would be social rent, 10% intermediate, with an additional 5% intermediate, supplied with the help of grant funding. However, the term ‘social rent’ does not appear anywhere throughout Berkeley’s planning application, with the documents eg the viability assessment, using the term ‘affordable rented’ or just ‘rent’ instead.

Even the Mayor’s Stage 1 planning report avoids using the term ‘social rent’ and instead describes the proposed tenure as ‘low-cost rent’ (para 33) . This is yet another affordable housing label, newly introduced by the Mayor’s draft New London Plan, where it is defined to include London Affordable Rent, as well as social rent. The London Tenant’s Federationhas given evidence to the Mayor that there is a 43% difference between LAR and social rent, while the GLA has conceded during the Plan’s public examination that there is a 14% difference between new build LAR and social rent.

The Malt St S106 draft heads of terms document says that the exact tenure of the affordable housing will not be decided until after the application is approved:

We have seen before promises of social rent do no not necessarily guarantee that social rent will be delivered and we are still waiting for the promised audit of affordable and social rented housing, after a damning ombudsman investigation, which found that Southwark had not monitored or enforced the tenure requirements of its s106 affordable housing agreements.

No late stage review

Berkeley Homes’ viability assessment of the Malt St scheme says it will produce a ‘substandard return’ and it is technically unviable with 35% affordable housing (just as the developers of Ruby Triangle, Cantium Retail Park and Southernwood Retail did).

Southwark’s consultant’s agree with this analysis, albeit they calculate that the scheme is slightly less unviable than Berkeley claim. In any event, Berkeley offer 40% affordable housing on the understanding that the viability will be improved by better transport links (ie the Bakerloo Line Extension) and the ongoing regeneraation of the area. There is an important proviso, however – that there will be no late stage review.

This pre-empts any possibility that the amount of affordable housing will be raised to 50%, as required by the draft London Plan for Strategic Industrial land, such as the Malt St site – (the draft London Plan will be fully in force by the time Malt St is completed.)

Applications can avoid a late stage review, if they take the Mayor’s Fast Track Route, by providing, 50% affordable housing, but the Mayor’s planning report makes it clear this is not happening in this case:

“The application does not therefore follow the Fast Track Route with 35% affordable housing (as the threshold level would be 50% in this instance), and it must therefore be considered under the viability tested route.” (paragraph 32)

A 35% Campaign objection on this point is appended to the end of this blogpost.

Viability assessment flaw

An important part of viability assessments is estimating a scheme’s likely revenue. This is done by using ‘comparables’ ie the revenues other similiar schemes have realised. Berkeley Homes commissioned Savills for this task and they estimated an average sales value of completed homes of £776 per square foot.

Extract from the Savills report in Berkeley’s viability assessment (appendix 4a)

In arriving at this figure Savills uses Elphant Park (formerly the Heygate estate) where the sales are currently achieving £1,247 per sqft.

This is double the revenue estimate of £600 per sq ft Savills gave back in 2012, when it was commissioned for exactly the same task by Elephant Park developer Lendlease.

Extract from the Savills report in Lendlease’s viability assessment for Heygate estate redevelopment

The explanation for this big difference lies with the rule that viability assessments are based on current day values. This is a major problem in the viability testing method and is supposed to be mitigated by sensitivity analysis or scenario testing, where various increases in sales values are tested, but these tests are often inadequate. In the Heygate case the District Valuer Service, acting for Southwark, ran just one scenario, with a 5% increase in sales values, when the actual increase has proved to be just over 100%.

In the case of Malt St, Berkeley’s hasn’t done any scenario testing. The Council’s independent review has done some, but only with a 5% increase in sales values. More comprehensive scenario testing should have been undertaken, for a major schemes such as this, likely to take a decade to complete and where values will be affected by such a major variable as the Bakerloo line extension.

In the absence of this the very least the Council should do is secure a late stage review, which should ensure that any great rise in values does not solely benefit the developer’s profit, but is shared with local community, in the form of more affordable housing.

35% Campaign objection to no late stage review

“I am writing on behalf of the 35% Campaign to object to the recommended approval of planning application ref: 17/AP/2773.

The planning committee report for this application refers to the 40% affordable housing offer as exceeding the policy compliant level, stated as 35% (para 167). However, para 22 of the report also notes that the site is ‘designated Strategic Industrial Land (SIL), in the London Plan’; as such, the draft New London Plan requires a higher, 50% level of affordable housing under Policy H6, Para B(3).

The planning committee report gives weight to the draft New London Plan and other emerging policy to justify the release of industrial land for residential and other development (para 145), in the first instance; therefore equal weight should be given to the 50% affordable housing requirement for housing built on such land and 50% affordable housing required.

Without 50% affordable housing the application fails to qualify for the draft London Plan’s Fast Track route under the threshold approach to viability testing. Policy H6 is clear that applications that do not meet the 50% SIL threshold are subject to the viability tested route, which involves a Late Stage Viability review (Para E 2(b)). This is confirmed in the GLA Stage 1 report for the scheme (para 32), which states;

A late stage review should therefore be required if 50% affordable housing is not offered.

For these reasons and in the light of the Stage 1 report, we believe that the planning committee report is wrong when it states that the affordable housing offer ‘exceeds the 35% GLA threshold level’ and ‘re-provides the existing commercial floorspace’ and that therefore there need be no late stage review (para 171). (NB Nothing in Policy H6 says that the 50% threshold for SIL locations can be avoided if existing commercial floorspace is re-provided).

As the application is a large phased development a mid-term review should also be required, according to Policy H6, Para E 2(c).

35% Campaign update – Southernwood Retail Park

Southernwood Retail Park

May 27, 2019 12:00 am

Third of big four Old Kent Rd developments goes to committee

A proposal for the development of Southernwood Retail Park is due to be decided at Southwark’s planning committee this Tuesday evening. Developer Glasgow City Council, acting as trustees for its (Strathclyde) Pension Fund, wants permission for a mixed-use development of 725 residential units, with a hotel, cinema, shops, restaurants and offices. The proposed scheme has seven blocks, including a 48-storey tower. The site is currently occupied by Argos and Sports Direct, just opposite Tesco and over the road from Burgess Park.

Southernwood offers, in round figures, 35% affordable housing; 25% of the total housing will be social rent, 10% intermediate, in line with the emerging New Southwark Plan’sminimum requirements, giving 219 units.

Viability conundrum

Viability assessments have become notorious as a way for developers to avoid their affordable housing obligations. Over the past few years housing campaigners and several high profile cases have managed to shed some light on this practice, leading to changes in policy and greater scrutiny of developer’s viability claims.

In Southwark this had meant we are starting to get the 35% affordable housing that we have been denied until now. But while developers are offering 35% affordable housing, they continue to insist that their schemes are unviable. Southernwood Retail Park is a case in point. Here the developer (Glasgow City Council) claims that they will only make 2.24% (£8.4m) profit on Gross Development Value (GDV); Southwark’s consultants beg to differ and say 16.37% (£62.5m) can be made. Both figures fall short of Glasgow CC’s profit target (set by themselves) of 18.84% (£72m), so the development is technically deemed ‘unviable’.

Glasgow CC’s 18.84% target profit exceeds its benchmark return of 10.4% set by its pension fund manager for real estate projects (DTZ), who manage Southernwood on its behalf (See DTZ, pg 97 in Strathclyde Pension Fund’s most recent annual report).

Despite the Southernwood scheme being deemed ‘unviable’, Glasgow CC says that it will deliver 35% affordable housing, comprising 25% social rent and 10% intermediate, in line with minimum local policy requirements. The Council’s planning report accepts the 35% affordable offer, but without addressing the difference in the profit estimates or considering the difference in the profit target and the pension fund’s DTZ target benchmark.

After so many major developments at the Elephant & Castle and elsewhere in Southwarkhave been allowed to flout affordable housing requirements, this can be counted as progress, but leaves the true viability of the Southernwood scheme unresolved. This is important, because as well as all the minimum affordable housing requirements, there is also a general requirement to produce the maximum reasonable amount of affordable housing, which obviously cannot be known, unless the real viability position is known. There is also the danger that the development proves to be ‘undeliverable’ and the developer returns to get the promised affordable housing reduced.

The Southernwood scheme joins Ruby Triangle and Cantium Retail Park as an ‘unviable’ scheme that will deliver 35% affordable housing. Unlike Ruby Triangle, but like Cantium Retail Park, no ‘late stage review’ of viability is proposed for Southernwood. This is a comprehensive viability review where developers are required to disclose in detail actual costs and revenue received, to establish the scheme’s real profitability and enable the local authority to ‘claw back’ additional affordable housing, should the profit be greater than anticipated. Given the site’s position alongside the likely site of a new tube station should the Bakerloo line extension be built, this looks like a serious omission.

Affordable housing – 35%, 40% or 50%?

Two other features in the Southernwood application stand out – the first is that the applicant, Glasgow City Council, is reluctant to take advantage of any public funding, such as that available from the Mayor of London, which could raise the affordable housing to at least 40%, giving another 30 or so affordable homes. All schemes are expected to consider this, to maximise affordable housing, under the Mayor’s Housing policy. Glasgow CC’s surprising explanation for not applying for public funding is that it claims it will make the scheme less viable. As related in the planning committee report (Para 182,183), this is because the £28,000 per unit grant (for each of the 250 affordable homes) would not make up the full loss in value of converting 5% of the private market homes into affordable homes. It appears, however, that in reaching this conclusion Glasgow CC have used the highest values of the private flats in the 48-storey tower for comparison, rather than the lower-value private flats in the lower blocks, the difference being £600k per unit versus £500k per unit.

Glasgow CC also say that they will not be in time for the current funding round, which requires a start on site before 31st March 2021, notwithstanding that Phase 1 of the scheme would commence in 2021, to be “open and operational by 2022/23” (Para 44); the report simply proposes a condition that this is reconsidered before the scheme is implemented. The second half of the scheme won’t commence until May 2030 and won’t complete until 2033 (See para 57 of planning committee report).

The second feature is that the site is both owned by a local authority and is in an area marked as a Strategic Industrial Location and on both counts should deliver 50% affordable housing, according to the draft New London Plan, which would raise the number of affordable homes to around 360.

Glasgow CC submitted its own legal opinion on this, arguing that the site should not be considered as public land because it would ” penalise the members of the [Pension] Fund simply for having worked as public servants” (see para 173 of planning committee report). There can be no dispute that the land is owned by Glasgow City Council, on behalf of its pension fund, as land Registry deeds show; nonetheless Southwark and the Greater London Authority (GLA) have accepted Glasgow CC’s argument.

Southwark’s and the Mayor’s decision flies in the face of the Mayor’s planning policy, which has its own specific Guidance Note for determining what constitutes public land – Threshold Approach to Affordable Housing on Public Land (July 2018). This defines it as “Land that is owned or in use by a public sector organisation, or company or organisation in public ownership” (para 9). Anticipating disputes on the definition, the note goes on to say that these “will be determined with reference to the Public Sector Classifications Guide (PSCG) published by the Office for National Statistics and this guide lists Local Government Pension Funds as a public sector body, just as Glasgow CC is a public sector body.

Notwithstanding this Southwark argues in the legal advice appended to the planning committee report that imposing the higher 50% affordable housing “would reduce the capital value of the site and therefore the Fund’s ability to pay pensions to retired workers”and that “It would be unfair on the retired workers if their pension expectation might possibly be impacted..”

It might well be ‘unfair’ to pensioners if this happened, but it would also be ‘unfair’ to those who need affordable housing if it is not delivered when required by policy. It is also unfair on planning committee members who are recommended to approve this scheme without the detailed policy requirements or the alleged ‘impact’ on pensions having been properly explained in the planning report.

As unedifying as it would be to see two local authorities fight over their respective shares of a development’s profit, one on behalf of pensioners, the other, on behalf of those who need affordable housing, Southwark and the GLA’s responsibility in this situation is to vigorously represent the interests of those in housing need and it has not done so, by giving way so easily.

TfL gives scheme (many) red lights

There also appears to be major issues, to say the least, with Transport for London (TfL), particularly around the impact of the development on plans for the proposed Bakerloo Line Extension (BLE). In its latest communication of barely a month ago, in which TfL urges Southwark not to approve the application, except for “the rear portion of the site”, until the Bakerloo Line Extension (BLE) is complete, for fear that it will be compromised.

Extract from TFL’s Objection to the scheme

TfL make the damning accusation that Southwark has ‘no joined-up thinking’, which must sting after several years of consultation and planning for the yet-to-be adopted Old Kent Rd Area Action Plan (AAP) and Opportunity Area.

TfL examine eight aspects of the scheme for policy compliance – Strategic approach, Healthy Streets, Transport Capacity, Transport Assessment, Cycling, Car Parking, Deliveries, Funding – and gives the red light to six (meaning ‘Major changes/redesign required’), with amber for two, including ‘Funding’ (‘Further work required’)’. One of the more radical amendments TfL require for policy compliance is to move the proposed hotel, currently to face onto the Old Kent Rd, but overall TfL consider that it is ‘unlikely that the significant design changes and stringent management measures necessary to make the existing proposals workable can be made to address the issues’ raised.

The planning committee report addresses TfL’s objections at length, over 14 pages (Para 524 – 602). While it acknowledges the critical importance of the BLE to the success of the whole Opportunity Area, much of the remedy the report proposes depend on future agreements between all parties, including rival developers Tesco/Invesco, to be secured by s106 and other legal conditions after consent is granted, when the common-sense response is surely to resolve these problems before consent is given.


Southernwood provides the peculiar spectacle of one public authority building homes on land owned by another, but refusing to apply for public funding, because that would make an ‘unviable’ development more unviable, added to which it is promising to provide affordable housing the figures say the scheme cannot provide.

As noted above, Ruby Triangle and Cantium Retail Park were also both declared technically non-viable and depend upon the rise in land values that the Bakerloo Extension will bring, so should the problems feared by TfL occur, they may well have consequences for their promises of affordable housing too.

The TfL objections to Southernwood also adds weight to the argument that the whole Opportunity Area project is developer-driven, rather than plan-led and that the approval of major developments, such as Southernwood in advance of the adoption of the Area Action Plan is premature and rendering it redundant. Southwark should not be granting permission for a scheme in such a key location beforehand, especially when it is not due complete until 2033 and no late stage viability review is proposed.

35% Campaign update – Delancey deals double blow to shopping centre traders

Delancey deals double blow to shopping centre traders

Apr 29, 2019 12:00 am

Tesco leaves, bingo hall boarded

Traders at the Elephant and Castle shopping centre were dealt a double blow last week, by the closure of Tesco and the erection of a large unsightly hoarding, isolating shops on the second floor.


The 8-foot high boards surround the bottom of the escalator to the Palaces Bingo and Bowling Hall, which has now closed. Delancey claim it is necessary to prevent children getting onto the escalator and becoming a site for anti-social behaviour. Traders, however, have demanded its removal, saying it is blighting their trade and customers will assume that the centre is closing.

Traders were also rocked by Tesco’s announcement that it was permanently closing the Metro supermarket in the centre. This follows four weeks of closure, to deal with a mice problem.

Local news website, SE1, reported Tesco as saying “We have today announced to colleagues that we have taken the difficult decision to close our Elephant & Castle Metro store”. An earlier announcement had said that the store was only “temporarily closed” while Tesco worked with Delancey and “a specialist pest control company to take urgent steps to deal with this problem”.

Both these events will reduce the ‘footfall’ in the centre, which smaller traders rely on for their custom and the responsibility lies squarely with shopping centre owner and developer Delancey.

The hoarding on the second floor is oversized, obtrusive and unnecessary. The Palaces can be safely closed by securing the doors at the top of the escalator, and the escalator itself does not need an 8-foot high barrier to prevent children climbing on to it. The hoarding was erected without any consultation with traders and is having a detrimental impact on their businesses.

Delancey manage centre’s decline

Delancey have been the landlords of the shopping centre since 2013, when it bought the centre with the express intention of demolition and redevelopment. Tesco’s departure is clear evidence that it has failed to keep the centre as a fit place to trade. It follows traders’ long-term complaints that the centre is being deliberately run-down, complaints which were described as having ‘some validity’ by Southwark Council planning officers.

Delancey are obliged by the terms of its legal s106 agreement to give 6-month notice of both the centre’s closure and any demolition. Campaign groups and traders fear that it is evading this obligation, by closing the centre bit-by-bit. Many traders are also angry at being excluded by Delancey in its allocation of alternative premises. The latest figures from Latin Elephant show that there are still 62 shopping centre traders who haven’t been offered any relocation space.

Southwark Council have taken no action, either to deal with the rodent problem or to force Delancey to abide faithfully by its s106 agreement.


Petition – Keep Tesco at the Elephant!

We think that it cannot be beyond Tesco’s resources to solve this problem and Southwark Council should be insisting that it does so, not standing idly by. The Up the Elephant Campaign has started a petition, ‘Keep Tesco at the Elephant! – please sign it and share!

Save the Elephant’s Diverse Community!

35% Campaign is part of the Up the Elephant legal challange to the planning approval for the redevelopment of the centre, on the grounds that it fails to provide enough social rented housing. If you would like to help us in our fight, you can donate to our funding appeal here.