The UK’s largest REIT is to restart development of a 22,600-unit residential project after reaching agreement with central government departments and local authorities over local infrastructure according to IP Real Estate.
Land Securities, whose major shareholders include the Norwegian sovereign wealth fund and Dutch pension fund managers APG and PGGM, halted work on the brownfield site in southeast England in 2006.
The New Zealand state pension fund, the UK Universities Superannuation Scheme and Swedish pension insurer Alecta are also shareholders in the REIT, which did not respond to requests for comment on the deal reached this week.
However, a government spokesman said: “It was a question of banging heads together to get it off the ground.”
The Montague Review, published last week, identified undersupply of UK residential as one of the main barriers to institutional investment in the sector.
In its first phase, the regeneration project announced this week will deliver 1,500 units by the end of 2013 as part of a regeneration project in Kent Thameside, and a total of 4,500 homes by the end of 2020.
A government statement described the deal reached this week on the 20-year programme to create a new town on the bank of the Thames as “historic”.
The spokesman was unable to explain why the project had been on hold for such a long period, saying only: “It’s been a saga. There was a whole host of issues, but transport infrastructure and finance have both been factors.”
Having already invested £100m (€126m) in the project, Land Securities is understood to have halted development apparently as a result of a dispute with public sector bodies over demands that it pay £40m towards road building.
This week’s agreement reduced the contribution to £25m, payable in instalments.
Before halting development, the REIT urged the then government to create a platform “that encourages, rather than discourages, our potential contribution” to regeneration.
While the planning minister suggested this week that the deal could create a blueprint for other stalled developments, Kent local authority leader Paul Carter said he would only work with developers on stalled projects if they were “intent on accelerating development”.