£1.5bn project 'down the Tube'

Transport for London’s demands that developers pay for road and Tube upgrades at Elephant & Castle threaten to derail one of the capital’s biggest regeneration projects, according to a key landowner. St Modwen Properties, owner of the famous pink shopping centre, claims that infrastructure “contributions” of up to £500 million are being demanded.

The shopping centre, which lies above the Tube station and between two busy roundabouts, is pivotal to the area’s redevelopment. TfL is conducting an 18-month feasibility study because it wants to change the road layout and provide a new station to cope with the anticipated increase in traffic and passengers.

More than 5,000 new homes and two million square feet of office and retail space are part of the £1.5 billion regeneration scheme.

Last July, Southwark council chose a consortium led by developer Lend Lease to deliver the project. St Modwen was the shortlisted favourite but failed to win the bid in spite of the shopping centre being a “ransom strip” that can make or break Southwark’s masterplan for Elephant & Castle.

St Modwen says the issue of infrastructure costs has to be sorted out before redevelopment of the shopping centre can go ahead, whether by the company alone or as a joint venture with Lend Lease.

“We’re talking significant numbers - not just tens of millions of pounds,” says Tim Seddon, London regional director of St Modwen.

“Arguably, certain costs should be carried by TfL because its primary obligation is to deliver a transport system fit for the citizens of London in the 21st century. The question is how much can reasonably be passed on to a developer.”

A TfL spokesman said: “A feasibility study is being carried out that will identify the transport services appropriate for the scale of this development. This needs to be completed before we can reach any conclusion on the level of investment that may be required.”

St Modwen says it has no commercial urgency to redevelop the shopping centre, which “continues to trade well and works as a standing investment”. Only four of the 80 retail units at the centre are unlet.

Residential development within the 170-acre regeneration zone is continuing. Oakmayne Properties, part of the Lend Lease consortium, is soon to launch Oakmayne Plaza, a high-rise scheme of 312 flats overlooking a new market square.