Tesco planning four ‘mini-villages’ complete with supermarkets

Published 26th Apr 2010

Tesco already provides everything you need to stock a home, from groceries to garden furniture. Now it is going to build the house as well.

The supermarket chain plans to develop four “mini-villages” in the South East along with “mixed-use living and leisure” schemes in Ipswich and northeast England.

The schemes feature scores of homes, all near a Tesco store. The plans raise the prospect of people finding a home in a “mini-village” through the company’s estate agent service, securing a mortgage through its banking arm and fitting it out with Tesco products bought on one of the company’s credit cards.

Tesco’s renewed focus on housebuilding comes amid a market recovery, with prices up about 10 per cent since last April and even more in the South East.

It is also taking advantage of traditional housebuilders’ failure to raise money from banks. Developers have been forced to build smaller schemes than envisaged to avoid the need for large infrastructure investments.

Critics said that the competition and regulatory authorities needed to investigate Tesco’s tightening grip on the economy in order to avoid the development of monopolies.

Josh Ryan-Collins, of the New Economics Foundation, said: “There’s a sense that they are using their market power to dominate aspects of the economy. There is a need for more affordable housing but there is a danger with Tesco’s moves. “If they provide the mortgage, if they act as estate agent, if they provide a credit card, if they sell you a house, they will end up with more personal information about you than the Government.”

The “mini-villages” are due to be built in Bromley-by-Bow, East London, Dartford, Kent, Streatham, in South London, and Woolwich, southeast London. Tesco’s diversifying plans, first mooted before the credit crunch, received a boost last month when Lambeth Council gave the go-ahead for it to build 200 homes, a bus depot and ice rink in Streatham.

It is expecting approval next month for the 400 homes, primary school, hotel and park that it plans to build in Bromley-by-Bow, close to the Olympic Park. It is also in advanced talks with Dartford Borough Council over a development of around 1,000 homes. It is finalising the details of 900 homes in Woolwich, where work has already begun on a library and civic centre.

Spen Hill, the supermarket’s development arm, is also introducing the “mixed-use” model of leisure, shopping and living facilities to other areas. Consent has been granted for a scheme in Ipswich that will have some flats and it is in talks with councils in Gateshead and Sunderland about bringing the model to the North East.

Since 2007, Tesco has planned to redevelop a site in Gateshead known as the Get Carter car park because it featured in the 1971 Michael Caine film. Tesco has built stores with flats in Clapham and Kensington in London, with other developers.

It is understood that Tesco is less likely to pursue joint ventures with its latest schemes but will use contractors for the building work. It says that the plans will create 1,000 jobs.

Alastair Crowdy, head of planning at GL Hearn, a property consultancy, said that Tesco was in an uniquely powerful position. “It is in a good position to develop because it is a very strong covenant and a very strong brand, whereas other developers may struggle to get finance,” he said.

“If a development comes with a store, then it is easier to get funding. People have been living above stores for years. It works in other locations.”

A Tesco spokesman said: “Through innovative mixed-use developments such as Bromley-by-Bow and Streatham we are able to invest and create jobs in areas that many other developers cannot and will not.”

Source: ' Times '

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