- The proposed redevelopment included 1,744 homes, student accommodation and a new shopping centre across a 17-acre site.
- Landsec says higher interest rates, construction costs and a dispute over affordable housing have made the project difficult to deliver.
- The company says it remains committed to Lewisham and will focus on investing in and operating the existing shopping centre.
A £1.5bn redevelopment of Lewisham Shopping Centre has been put on hold, dealing a fresh blow to one of south London’s major regeneration projects.
Landsec, which owns the shopping centre, said it was “deprioritising” the scheme after concluding that there was no sufficiently certain route to delivery under current economic conditions.
The decision comes a year after Lewisham Council approved plans to demolish the existing shopping mall and a multi-storey car park to make way for a new development featuring homes, student accommodation and retail space.
The masterplan covered 17 acres and proposed 1,744 homes, with tower blocks reaching up to 35 storeys. It also included 661 student rooms and a 23-storey co-living building containing 445 homes.
Landsec had planned to deliver the project in six phases over about a decade, with construction expected to begin next year. The company has now shifted its focus to other residential projects.
Affordable housing dispute adds to uncertainty
The redevelopment had faced criticism from local campaigners over the amount of affordable housing proposed.
Of the 1,744 homes, 98 were earmarked for social rent, while another 231 were intended for discounted market rents or key workers. Critics argued that the plans did not sufficiently address local housing needs.
Landsec said the council's position on the next stage of land assembly had added to the uncertainty. The company said the administration was unable to support the next phase without a significant increase in affordable housing, which would require changes to the masterplan and cause substantial delays.
The scheme also depends on securing control of the entire site before work can begin on its first phase. One complication involves Lewisham House, the former Citibank tower, where Landsec owns the freehold but the long-term lease is held by Guernsey-based developer LHN1.
Landsec said higher interest rates, increased construction costs and more complex regulations had made development in London increasingly challenging.
The company added that these pressures, alongside uncertainty over the delivery programme, had prompted it to prioritise other projects.
Landsec says it remains committed to Lewisham
Landsec said shelving the redevelopment did not mean it was leaving the borough, where it has owned and operated the shopping centre for more than 20 years.
The company said it would continue investing in the existing centre, supporting retailers, customers and community partners, while remaining involved in the borough's future.
The decision has drawn mixed reactions locally. Some campaigners welcomed the pause, arguing that the scheme risked displacement and did not provide enough affordable housing. Others had been looking forward to construction and the prospect of new homes and retail facilities.
Lewisham's Green Party mayor, Liam Shrivavasta, said he knew residents had differing views on the development and acknowledged that conditions for major projects were currently unfavourable.
The setback comes amid wider concerns about the viability of large housing schemes in London. Housebuilder Taylor Wimpey has recently warned that the case for major projects in the capital has weakened amid planning delays and rising costs, while Berkeley has criticised decisions affecting developments in Peckham and Kingston upon Thames.
For Lewisham, the immediate focus is now on the existing shopping centre, with the future of the wider redevelopment uncertain.
