Lewisham shopping centre redevelopment paused

A billion-pound redevelopment of Lewisham Shopping Centre has been paused because of "exceptionally challenging economic conditions", according to the centre's owner.

Plans for the 17-acre site, approved by the council in October 2025, included 1,744 homes, student accommodation and a new shopping centre.

Landsec said it was "deprioritising" the scheme, adding it was "no secret" that higher interest rates, rising construction costs and more complex regulations had made development in London "increasingly challenging".

The decision also comes after Lewisham's Green Party-led administration declined to support the next phase of land assembly without a significant increase in affordable housing.

The existing 1970s shopping mall and multi-storey car park were set to be replaced with new buildings, including a tower reaching up to 35 storeys.

The project was expected to take 10 years to complete and be delivered in six phases.

Work on the first phase had been due to begin next year, with the overall cost of the project estimated at between £1.3bn and £1.7bn.

The plans were controversial, with campaigners raising concerns about the level of affordable housing.

Of the 1,744 homes proposed, 98 would have been for social rent, while 231 would have been offered at discounted market rates or reserved for key workers.

The scheme also included 661 student rooms and a 23-storey co-living block containing 445 homes.

A Landsec spokesperson said: "Recent statements from Lewisham Council also make clear that the administration is not able to support the next phase of land assembly needed to unlock delivery without a significant increase in affordable housing.

"This would require material changes to the masterplan resulting in substantial delays to the programme."

Landsec still needed to secure control of the entire site before work could begin on the first phase, including the former Citibank tower, which is known as Lewisham House.

While Landsec owns the freehold, the building's long lease is held by LHN1, a Guernsey-based developer.

In January 2026, Lewisham's previous Labour administration approved in principle the use of compulsory purchase powers for Lewisham House.

At the time, the council said these powers would be a "last resort", but warned that delaying the process could result in valuable time being lost.

However, the Green Party took control of the council in May and mayor of Lewisham Liam Shrivastava has since said any use of compulsory purchase powers "must be justified by a clear and compelling public benefit".

Shrivastava said: "This administration is laser focused on delivering genuinely affordable housing and I've consistently said the level of social rent homes in this scheme needed to increase.

"I recognise the strength of feeling of those concerned about the development. I also know there were many other residents and businesses who wanted to see it come forward.

"The fact is the conditions for such projects are simply not favourable right now."

A spokesperson for Lewisham People's Assembly, a community group which opposed the plans, said members were "very pleased" the scheme had been paused.

The Landsec spokesperson said its focus "will now be on operating and investing in the existing centre, supporting our retailers, customers and community partners, and continuing to play an active role in the borough's future".

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