Superstores across the capital are shrinking to free up space for thousands of new flats

Posted on Monday, October 16, 2017

Superstores across the capital are shrinking to free up space for thousands of new flats

City planners and politicians, desperate to unlock land for house building, are encouraging supermarkets to redevelop low-rise stores where space is going to waste.

For years supermarkets have raced to gobble up massive brownfield sites as shoppers showed an insatiable appetite for mega stores.

These sites are now providing an enormous opportunity — about 150,000 homes in London could be built above or alongside stores, says property analyst GL Hearn.

Pass the pint of milk test: the £86 million Woolwich Central scheme, with 259 flats and the biggest Tesco in Europe on site

Every chance should be taken when Britain needs at least 230,000 new homes each year to make up for the current deficit.


Tesco has already completed projects in Woolwich and Streatham, and identified another 20 “air rights” sites in London expected to bring at least 9,000 homes.

Under way is a development at Morning Lane, Hackney, where a small store will replace a bigger one to free up land for more than 300 “own-brand” homes.

Rival Sainsbury has teamed up with Barratt at Fulham Riverside and Nine Elms Point, Vauxhall, both of which have spectacular gardens above new supermarkets next to glamorous apartment blocks where homes are now for sale.

Live above the shop: Streatham's High Road Hub includes new flats, sports facilities and a Tesco Extra supermarket

Sainsbury and builder Mount Anvil are working up plans for a huge site next to New Cross Gate train station, while Morrisons is to build 700 flats and houses at Chalk Farm Road, Camden.


For supermarkets, such redevelopments bring a welcome profit boost at a time of intense competition and changes triggered by internet shopping.

Sainsbury netted a £95 million profit from the Vauxhall deal alone, while Tesco expects air rights to generate at least £400 million, with a further £1 billion from offloading land, car parks and under-utilised space in stores.

The grocery giants are investigating ways to make above-store building more cost-effective. This includes off-site construction, or prefabricated homes, assembled in a factory and then craned into position.

“There are huge benefits to mixing supermarkets and housing,” says Michael Bickerton of development consultant Cushman & Wakefield. “It’s an efficient use of land and can create a new neighbourhood hub in areas that need regeneration.”

But will this be good building — or just a way of making money for supermarkets?

Supermarket sweep: inside one of the flats in the £86m Woolwich Central scheme 

There are concerns about the architectural quality of the homes to be built, including fears that supermarkets could adopt the “pile them high, sell them cheap” approach that turned them into global businesses in the first place.

So, careful design, including creative landscaping and attractive public spaces, is needed to protect buyers from noise, smells from waste storage, the disruption of night-time deliveries and the general bustle of everyday operations.

Living above the shop is not something new, and in some ways the supermarket sweep is a large-scale reinvention of the traditional high street, which had shops at street level and homes above — a classic model that we know works.

Others point to the “Waitrose effect”, where homes associated with a prestige brand might cost more and sell for more. John Lewis and Marks & Spencer are thinking of entering the fray.

Thoughtful landscaping: Fulham Riverside's gardens include a croquet lawn, maze and rooftop waterfall

Apex Airspace, a company that specialises in “air rights” development, says it is talking to five leading supermarkets about over-the-shop homes.

It is not just supermarkets who are adding homes to shopping lists. DIY retailers such as B&Q, even the Royal Mail, are exploring opportunities above their buildings.


It is an issue of land economics. When land is scarce, owners and developers have to become more innovative.

“Air rights” involves selling the rights to build over retained land on a long leasehold basis. So even where supermarkets collaborate with house builders, they can retain the asset of the land.

Owners of industrial land and warehouse distribution centres are even investigating the feasibility of “sheds and beds”.

Segro is bringing forward one such scheme at the former Nestlé factory in Hayes, west London, in partnership with Barratt Homes.

The intention is to develop industrial premises and high-density housing on the 45-acre site. Segro says there is a compelling case for “mixing up homes and jobs”.

Old Oak, a vast industrial district in west London earmarked for a transport super-hub, is also ripe for this concept and has already attracted a “co-living” development of micro flats.

Downsized: the Sainsbury store at Fulham Riverside was reconfigured on stilts with parking underneath and gardens above

To free up space for homes at eight-acre Fulham Riverside, Sainsbury downsized its supermarket and put it on stilts, with car parking underneath.

Above the supermarket sit beautifully landscaped podium gardens with a spectacular waterfall cascading down to the river. 

Tiered levels have a maze, a croquet lawn, a badminton court and outdoor gym, along with picnic areas and hedging, to offer a sense of sanctuary. A central avenue lined with stylish townhouses, each with a lift, links with a new riverside promenade.

These homes have just been launched and cost from £3.25 million. Call 0844 854 9942.

Where once stood a land-eating low-rise supermarket, at Nine Elms Point, 647 homes are being built. Seven new buildings, including two striking towers, sit next to a compact store and more than an acre of private gardens.

The development also brings a new Northern line Tube station, due to open in 2020. Prices from £620,000. Call 020 7501 3777.