A joint venture between Australian property heavyweight Lendlease and US property group Starwood has taken over as the development partner on the £3.5 billion ($6.1bn) Silvertown Quays brownfield development in east London.
The Silvertown Partnership, a consortium made up of Chelsfield, First Base and Macquarie Capital, originally bought the industrial area between Canary Wharf and London City airport from the Greater London Authority in 2012.
The partnership won planning permission in 2016 for its own project but was unable to secure a financial backer for the 20-hectare site.
Lendlease and Starwood have now acquired the site from existing shareholders for an undisclosed price on a 50 per cent co-investment basis.
The development, dubbed Silvertown Quays, will now create 650,000sq m of residential and commercial space, including 3,000 homes and the restoration of the historic Millennium Mills and the listed Silo-D building.
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Starwood, one of the biggest global owners of built-to-rent housing with a portfolio of $70 billion in assets under management, will work with Lendlease on the affordable housing component of Silvertown Quays.
The new development will also include a new walking and cycling bridge linking the site to Custom House station that will benefit from the Crossrail later this year.
“We are excited to partner with Lendlease on this prominent East London regeneration scheme that will help address London’s much needed affordable housing and private residential demand," Starwood global head of real estate acquisitions Jeff Dishner said.
“We believe in London’s long-term growth potential and are confident that the underlying value for this waterfront site will benefit from Crossrail connections and deliver a new gateway destination creating a strong visitor experience.”
The announcement of the new deal comes a month after the government gave the green light to the much-delayed £1bn ($1.8bn) Silvertown Tunnel scheme.
The tunnel will run under the River Thames and link the new development to south London.
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“London is universally recognised as one of the world’s most exciting cities," Lendlease chief executive of international operations Dan Labbad said.
“In order to maintain its rich mix of cultures and people, the city must continue to deliver projects like Silvertown Quays.”
The project will also incorporate restoration of the dock walls, new public spaces, as well as commercial and retail space.
“Working in partnership, we plan to create a place that’s innovative and environmentally sustainable, and will provide tangible benefits for the local community for the long-term,” Labbad said.
Lendlease has been active around the continent with more than $20 billion in its European project pipeline.
Lendlease recently beat out international rivals to secure the $7 billion contract to develop Euston rail station in London as well as the redevelopment of High Road West.
In Italy, the company also secured the $3.5 billion Milano Santa Giulia development and is preferred bidder on the $3 billion Milano Innovation District.