Landsec has paused the billion-pound redevelopment of Lewisham Shopping Centre in South East London, one year after councillors approved the plans. The company cites "exceptionally challenging economic conditions" and says it will now focus on "operating and investing in the existing centre."
Landsec Deprioritises Scheme Amid Economic Challenges
Landsec, which owns the shopping centre, announced it is "deprioritising" the scheme after encountering difficult market conditions, choosing to concentrate on other projects instead. A spokesperson for Landsec said: "Today's news does not mean that we're leaving Lewisham. We have owned and operated the shopping centre for more than 20 years and remain committed to the borough."
"Our 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," the spokesperson added.
Plans Included 1,744 Homes and 35-Storey Towers
Plans to build 1,744 flats, student accommodation and a new shopping mall across 17 acres were approved by Lewisham Council's Strategic Development Committee in October 2025. The planning permission allowed Landsec to demolish the existing 1970s mall and a multi-storey car park to make way for tower blocks up to 35 storeys high. However, the plans faced backlash from local campaigners over a lack of affordable housing and concerns they failed to address local need.
Of the 1,744 homes, just 98 would be social rent homes, while 231 were set to be rented out at discounted market rates or would be for key workers. Additionally, Landsec intended to build 661 student rooms and a 23-storey co-living block containing 445 homes. The project had been split into six different phases with a timeline spanning 10 years, and work was due to start next year. Landsec's masterplan had a reported cost of between £1.3 billion and £1.7 billion.
Council Demands More Affordable Housing
The Landsec spokesperson said it was "no secret" that higher interest rates, increased construction costs and more complex regulations have made development in London "increasingly challenging." They added: "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."
As the development was being carried out in phases, Landsec needed to own all of the site to start work on the first phase. This includes unlocking the former Citibank tower, also known as Lewisham House. Despite Landsec owning the freehold of the site, the long-term lease is actually owned by LHN1, a developer based in Guernsey.
In January 2026, the previous Labour administration approved in principle the use of compulsory purchase powers for Lewisham House. The council said at the time that using its powers would be a "last resort," but said delaying the start of the compulsory purchase process could lead to valuable time being lost in progressing the project. However, since the new Green Party administration came into power in May, the Mayor of Lewisham, Liam Shrivastava, said any use of compulsory purchase powers "must be justified by a clear and compelling public benefit."
Mayor and Campaigners Respond
Mayor 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." He added: "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."
Mayor Shrivastava said the council will continue to work closely with Landsec to improve Lewisham town centre, including lobbying for the Bakerloo Line extension to Lewisham and reopening Model Market. He added: "Our ambition for Lewisham town centre is undiminished. The council's £24 million programme of town centre improvements is already underway. This includes investment in Lewisham Market, the redevelopment of Lewisham Library, and projects to make the town centre cleaner, safer and more attractive for residents, businesses and visitors."
A spokesperson for the Lewisham People's Assembly, a community-led group which has campaigned against Landsec's plans, said: "We are very pleased with Landsec's most recent announcements. The drafted plans were financially reckless, with the council projecting that Landsec would lose half a billion pounds if construction started today. Landsec was essentially gambling on the present housing security of local residents."
They added: "The redevelopment being halted with no clear new start date brings a new opportunity for Lewisham. We still want to see development and investment in Lewisham, but now this brings opportunities for proposals that actually work to sufficiently meet community needs rather than making them a mere afterthought." The spokesperson said the group plans on looking at different avenues "to realise and advocate for this vision" in the coming days.
They added: "We would like to see investment and development into Lewisham Town Centre that looks into refurbishing and upgrading underused or deteriorating spaces. [We want to see] financially responsible decision-making and valuing existing architecture and culture of the area for a redevelopment model that's cheaper to implement, minimises potential displacement outcomes and is environmentally friendly. Slow and responsible solutions should take precedence over rushed and risky ones."
