In his second article on Landsec’s decision to pause the shopping centre development, Cllr Daniel Dream looks at the debate over the old Citibank tower and the possible use of compulsory purchase powers
In the first part of this article, I set out why the numbers for the Lewisham Shopping Centre redevelopment have never added up. This part turns to the old Citibank tower, the compulsory purchase process and what is being said online. As before, the views are my own.
Much of the debate about Landsec’s decision has skipped two simple questions: what would the old Citibank tower have cost, and did Landsec need to ask the council to use its compulsory purchase powers?
Landsec owns the land under the old tower, but another company, LHN1, holds a very long lease on the building. Landsec wanted the tower as part of its development, and with planning permission already in place for its scheme, buying it by agreement came down to settling on a price. The council’s report from January 2026 shows that the two companies reaching an agreement was also Labour’s preferred route.
I am one of the few people who have been in the room with both companies, separately. The report Labour’s cabinet agreed at the start of this year says offers to buy the tower had been made but no deal had been struck. It also calls compulsory purchase a last resort. As I understand it, Landsec offered one price and the leaseholder wanted a higher one, and the gap was very small next to a scheme costing well over a billion pounds.
Gaps like this are usually settled between the two companies, with compulsory purchase kept as a backstop for when they can’t. Before any order could be made, Landsec would have had to show it had made proper attempts to buy the tower by agreement. That case was never put to the current Mayor, and under the council’s own conditions an order could not have gone ahead without it.
A compulsory purchase order (CPO) can force an owner to sell their property against their wishes. Because it overrides property rights, the law sets a high bar: the public benefit has to be compelling, the owner can object and the government ultimately decides whether the order goes through. A CPO would not have made the tower free. Landsec would still have paid compensation and the costs of the process, which usually takes far longer than a deal. When Landsec’s statement talks about “land assembly”, this is what it means.
In January, the previous Labour administration agreed “in principle” to use these powers if negotiations failed. Its own report said a second decision would be needed to make the order, and the Mayor could only take it after seeing evidence that Landsec had made reasonable efforts to agree a sale, that the public interest case was compelling and that Landsec had a solid business plan and a clear way to pay for the scheme.
The last condition, a clear way to pay for the scheme, matters because of what Landsec told its investors. It had already pushed back its possible start at Lewisham from 2026 to 2027. Then, in November 2025, two months before Labour’s January decision, Landsec said it did not plan to put any significant money of its own into new development for the next 12 to 18 months because returns from building were less attractive than from investing in retail.
In May 2026, it moved the possible start back again, to 2028, said development returns were still not sufficient and said any start would be no earlier than late 2027. Without enough money committed, Landsec was not on course to meet that condition, and I am not aware that it ever put a plan forward. As I read it, showing a clear way to pay would have been difficult when the whole scheme was forecast to lose around half a billion pounds.
That second decision, to make the order, never came to the Mayor. No actual request for a CPO has ever been put forward.
The Mayor has been open that any use of these powers would need to come with more social housing as part of a compelling case in the public interest. People can disagree with that judgement but it was never put to the test and the financial numbers belong at the centre of any honest account of why the scheme has paused.
Our conversations with Landsec about social rent were practical and included different ideas on how the council could help bring certainty to the scheme. We never demanded a specific figure and only discussed possible pathways towards an increase. The people from Landsec I dealt with were receptive and engaged, and they put forward different ways the numbers could improve, including public grant for affordable homes, which their original published figures had not assumed. There was no blockade on either side. The statement released by Landsec last week says more affordable housing would have meant a material change to its plans. That does not reflect the conversations I was part of. In the room, nobody asked for the masterplan to be redesigned.
Lewisham Labour’s leader, Cllr Ese Erheriene, says the town centre has lost £1.5 billion of investment and more than 300 affordable homes. I do not think either claim stands up. The £1.5bn was the scheme’s indicative total cost, not committed money, and Landsec had already told its investors it did not plan to put meaningful capital of its own into new projects for 12 to 18 months.
The affordable homes, 98 for social rent and around 230 at a discount to market rent, were all in the later phases. Only the rough outline of those phases had been approved, and planning permission does not guarantee something will be built. That £1.5bn cost was also the heart of the scheme’s financial problem: against it, both Landsec’s consultants and the council’s independent assessors found the scheme forecast to lose around half a billion pounds. City Hall’s own experts also noted that the discounted homes would likely need a deeper discount to count as genuinely affordable.
Labour’s committee approved the scheme three months after City Hall said the numbers didn’t add up. Notably, during the planning process, Labour-run Greenwich Council had objected to the scheme.
Lewisham Labour blames the Mayor’s stance on the CPO for the project being deprioritised. But more than three months passed between the January decision and the May election, and the final decision never came back to Cabinet under Labour. By their own conditions, the order could not have been made without a robust funding strategy. Labour are now blaming the Greens for not doing what they did not do themselves.
Three things are true at once. Building in London has become very hard. The sums never added up. Landsec deprioritised the scheme before it ever asked the council for a CPO.
I have met with leaders of other councils over the past weeks at various events, including Labour ones. They don’t share Lewisham Labour’s reading of this, and nor do the developers I have spoken to. After running this borough for most of the last half century, Labour should be honest that the town centre’s need for renewal grew on its watch.
Looking ahead, Landsec will continue to run the shopping centre, which I believe it has done well, and says work to reopen the Model Market is continuing. The council’s £24m town centre programme is already underway, investing in the market, refurbishing the library and making the town centre cleaner and safer.
None of this makes Landsec’s decision any less disappointing. I wanted to see a scheme on that site that worked for Lewisham, and I still do.
I have seen Lewisham Labour claim online that developers will now be scared away from the borough. In a reply under their open letter, a former Labour Cabinet member wrote to a current councillor that he would “be sure to let all developers know your position on this.” Whatever he meant, I do not think telling developers that a borough is difficult to build in helps residents who need homes. We are in numerous discussions with other developers and we are a pro-development borough. Those conversations are moving well and there are exciting plans on the horizon.
I’m happy to work with anyone who wants to get homes built in Lewisham, Lewisham Labour included. I have no time for bun fights. My door is open to any developer who wants to talk about what it takes to build in Lewisham.
Documents referred to in this part, all public. On the Council’s meetings website: the Mayor and Cabinet report “In-Principle Use of Land Assembly Powers”, 21 January 2026, and the Strategic Planning Committee report and addendum, 16 October 2025. On the Council’s planning portal (application DC/24/137871, Documents tab): the Quod, BNP Paribas and GLA assessments. On Landsec’s website (Investors, Results and reports): the results of 14 November 2025 and 14 May 2026. On GOV.UK: the 2019 guidance on the compulsory purchase process. Landsec’s statement, October 2026, as published by the press.
The first article on the shopping development is here