From the regeneration of the iconic Battersea Power Station to the provision of tens of thousands of new homes, the US Embassy and the Northern Line extension, there is work for years to come in the Vauxhall and Nine Elms area of London. Construction News maps out the opportunities and talks to developers about their plans.
London has been quiet this summer, but not everywhere. Nine Elms is abuzz with activity.
With 195 ha across the boroughs of Wandsworth and Lambeth, the Nine Elms site is by far the largest regeneration zone in central London, with billions of pounds-worth of work on the horizon for contractors and subcontractors.
Many of the highest-profile schemes in the country sit within its boundaries, including the US Embassy being built by Sir Robert McAlpine for Ballymore and the £2bn renovation of the New Covent Garden Market by Vinci and St Modwen.
Just the beginning
There is much more to come. The Dutch Embassy is moving in and Sainsbury’s has a partnership with Barratt on a £450m 47-storey scheme.
In addition, CLS Holding and Wendover Investments are both expected to be seeking out contractors in the near future for the towers they have got planned.
CLS is due to start in 2015 with its two towers, worth upwards of £500m, at Vauxhall Square, while Wendover is planning two more worth £400m.
A further 2,000 homes have planning permission – along with a £50m section 106 bill – on a 13-acre plot owned by the Royal Mail, which is seeking a developer.
Meanwhile Chinese investor firm Dalian Wanda has snapped up the £700m One Nine Elms development, turning heads internationally, and is rumoured to be looking to appoint a contractor and start work quickly (see map, overleaf).
“When it gets down to delivery, the timing means it is likely that we need to be independent – but you never say never”
Tim Seddon, St Modwen
Berkeley’s St James arm is on site in three areas, with a total investment of some £600m – including £47m in section 106 commitments and £400m of building work over 1,120 residential units that include some commercial development.
Sister company St George is developing the St George Wharf project, while Berkeley Homes built out Chelsea Bridge Wharf.
Both Berkeley and St James are understood to be looking at additional opportunities in the area, and St James is seeking fit-out specialists for phase three, frame and envelope contractors for Riverlight 4 and has two more phases coming to market next year.
St James is also seeking contractors for piling, substructure, superstructure and facades on Hampton House, with early construction specialist Expanded, part of Laing O’Rourke, having taken the lion’s share of Riverlight contracts.
On the infrastructure side, four joint ventures have been shortlisted for the £600m contract to build the Northern line extension to Battersea: Bam Nuttall/Balfour Beatty; Bechtel/Strabag; Costain/Sir Robert McAlpine; and Laing O’Rourke/Ferrovial.
This will furnish the area with two new underground stations – one at Nine Elms and one at Battersea.
All in all, around 1,000 homes are under construction, a further 10,000 have planning permission and there are 5,000 more in the pipeline. And this is before the wealth of landscaping and public realm works, as well as infrastructure improvements to the stations and surrounding roads.
Differing developer approaches
Each of the developers on Nine Elms has its own plans and methods of contracting work, but they have formed a 17-strong strategy board that includes deputy mayor Sir Edward Lister and representatives from both local authorities, the Greater London Authority and Transport for London – represented by managing director of planning Michèle Dix.
The developers share progress on finance, priority projects, infrastructure and logistics.
A landowners group with some two dozen private sector members meets quarterly and sends representatives to the strategy board. The whole operation is co-ordinated by the Nine Elms Vauxhall Partnership.
“What you see over a period of time with anything of this scale is developers refining their plans”
Sean Ellis, St James
Strategy board working groups focus on community engagement, employment and business, housing and social infrastructure, public realm, transport management, utilities and wharves and planning updates.
It is at these group meetings where contractors and trades specialists will want their names to be mentioned, increasingly so as projects are set to ramp up in the coming years.
Much of the present discussions focus on the Northern line extension, which has a huge bearing on the viability of all the schemes in the area.
Co-ordinating so many mammoth projects can present moving targets. St Modwen and Vinci’s redevelopment of the New Covent Garden Market is a prime example.
The two are in the process of redesigning the project, which involves building a new market and then phasing the move of the traders into the new facility over several years on a 57-acre site.
The JV is expected to submit a new planning application, developed during the bid phase, later in the year, which is thought likely to scrap the hotel and supermarket elements of the scheme and increase the housing element by around 500 units.
Several new tall buildings are also proposed, along with a quicker delivery programme.
St Modwen regional director London and South-east Tim Seddon says the move is about “responding to the evolution in the area”, referring to the consents for CIT’s nearby Market Towers project and Sainsbury’s neighbouring project.
The strategy board makes it possible for the developers to work really closely together, he says.
“We are a collective – we all know what each other are doing. There are certain aspects of work where we will find synergy, such as construction access, the methodology of working.
“When it gets down to delivery, the timing means it is likely that we need to be independent – but you never say never.”
“As land values keep increasing, more and more developers are coming forward with schemes”
Keith Trotter, Nine Elms Vauxhall Partnership
Certainly the board allows for potential collective solutions to energy, for example.
St James is another developer making changes – originally planning a hotel but ditching the plan as it became clearer about the number of other hotel schemes in the area.
“What you see over a period of time with anything of this scale is developers refining their plans,” says St James Group chairman Sean Ellis.
What’s different this time?
There have been so many plans to regenerate Battersea, particularly the power station, which have been dreamt up and publicised, only to die a death.
What makes the Nine Elms developers so certain the regeneration can now bear fruit? The answer is a combination of new planning incentives and infrastructure upgrades.
Designation of the locality as an ‘opportunity area’ for large-scale development enabled it to use a fast-tracked planning framework, adopted in March 2012 as part of the mayor’s London Plan.
This combined with the reinvigoration of the power station project and the US Embassy’s decision to take space in Vauxhall gave the zone credibility as an employment area.
“There’s confidence in the market now in this area. Developers were assessing demand and knew they were going to go like hot cakes”
Keith Trotter, Nine Elms Vauxhall Partnership
It also allowed the mainly light industrial usage to be changed to commercial and residential, which created development value and gave councils incentives to approve plans by setting benchmark targets for planning authorities.
The Nine Elms Vauxhall Partnership, meanwhile, monitors sites and when thresholds are met, they call for more community infrastructure.
Crucially the combination of value rises and infrastructure upgrades has made it possible not only for schemes to be viable but also functional in a crowded construction environment. The Thames Tideway Tunnel project is a further strain on the area.
Vital Tube plan
The promise of the Northern line extension has been essential.
The announcement of a Treasury UK Guarantee of up to £1bn makes possible a Public Works Loan Board loan to pay for the scheme, roughly a third of which will be paid back by developers - with a huge chunk of that from the power station - with the rest through business rate uplifts over the coming 25 years.
As well as the underground, the area’s much-hated gyratory system is being redesigned by Lambeth Council and Transport for London and a new pedestrian bridge is planned, with potential landing points near the US Embassy and at St George’s Place in Pimlico.
Although the major development sites are set, smaller mixed-use schemes are expected to continue to proliferate in the area.
“As land values keep increasing, more and more developers are coming forward with schemes,” says the Nine Elms Vauxhall Partnership programme co-ordinator Keith Trotter.
“There’s confidence in the market now in this area. Developers were assessing demand and knew they were going to go like hot cakes.”
The main priorities for the public sector teams are to protect commercial usage and boost local employment.
Developers put together monthly reports for the councils and the NEV Partnership as part of the employment charter, which includes apprenticeships and training. They hold supplier days to highlight contracts coming up over the next 18 months or so.
Mr Ellis urges contractors who want a piece of the action to get involved. “We need their input,” he says. “Some of these projects require a high level of expertise and we want to try to engage contractors at the earliest possible stage to help them work with us to deliver the schemes.”
Strategy board members
Sir Edward Lister – deputy London mayor
Fiona Fletcher Smith and Stewart Murray – Greater London Authority
Lib Peck (co-chair) and Mark Harrison – Lambeth Borough Council
Ravi Govinda (co-chair) and James Cousins – Wandsworth Borough Council
Michèle Dix and Alex Williams – Transport for London
Sean Ellis –Berkeley / St James Group
Peter Halpenny – Ballymore
Jan Lloyd – Covent Garden Market Authority
Tim Seddon – St Modwens
Eugene Doyle – Royal Mail Group
Rob Tincknell – Battersea Power Station Development Company
Jonathan Rawnsley – Sainsbury’s
Richard Tice – CLS Holdings