Westfield and Landsec drop out of running for HS2 development

HS2’s shortlist for the £4bn redevelopment of Euston station, NW1, has been whittled down to three, after Westfield and Landsec dropped out of the running. Argent Related’s Euston Regeneration Partnership, Lendlease Europe, and Canary Wharf Group are now competing for one of the UK’s most significant schemes. Westfield walked away due to the shortage of retail it would be able to integrate into the scheme, while Landsec has also abandoned its bid. Hong Kong listed developer MTR Corporation is understood to be considering partnering with one of the shortlisted parties for the 54-acre opportunity. HS2, advised by Deloitte, is now considering detailed proposals which were submitted by bidders earlier this week. A master development partner is expected to be selected at the beginning of 2018. Earlier this year British Land surprised the market by choosing not to bid for the redevelopment, despite having been chosen a decade ago as Network Rail’s development partner for Euston in part due to its scale, complexity and the length of build out. The REIT also already has a significant development pipeline with major schemes in Paddington, Broadgate and Canada Water. Landsec, on the other hand, has a dwindling central London development pipeline, after all but completing its most significant project around Victoria station. It has simultaneously let most of its London offices: for example, Deutsche Bank agreed a 564,000 sq ft prelet at its 21 Moorfields scheme last month. Camden, the local authority which will rule on the Euston winner’s development plans, has identified in its Euston Area Plan the opportunity to create up to 3,800 new homes and 3m sq ft of commercial space. Enhanced public realm and greater permeability across the estate will also be priorities. Argent Related’s Euston Regeneration Partnership includes an agreement to work with Sydney & London, which owns the four properties that make up the Euston estate, meaning if it is successful, no CPO will be necessary. The partnership has a strong pedigree, given US developer Related’s track record in delivering complex rail-focused schemes such as Hudson Yard in New York – America’s largest development project. Argent’s existing ties with Camden, drawn from its King’s Cross Central scheme, may also work in its favour. But Lendlease and Canary Wharf Group are equally well-funded, and both have delivered major developments, such as Lendlease’s International Quarter in Stratford and Canary Wharf’s Walkie Talkie at 20 Fenchurch Street. To send feedback, e-mail nick.johnstone@egi.co.uk or tweet @n_johnstone or @estatesgazette