Nestlé building to become housing: a sweet deal for Croydon?


By - Monday 4th March, 2013

On 11th February 2013, Croydon Council resolved to grant planning permission to change the use of the former Nestlé UK headquarters  from office to residential use. Tom Lickley examines whether the Council has made the right decision in allowing for less affordable housing than their own Croydon Plan requires


Photo by Diamond Geezer

The Nestlé building is one of the most striking buildings in Croydon; not for its beauty (its architecture is a relic of 1960s monolithic design), but for its height, which serves as a reference point for the centre of Croydon for miles around. It is because of this notoriety that it was important that either a new tenant or a new use for the building was found quickly – a large building such as St George’s House standing empty in the middle of Croydon would have steered away investors, not to mention further sapping the morale of a town with the nearby former Allders store also standing empty. Positively, Legal & General, the pension and insurance company, stepped in to secure the site and submitted plans to change the use of the site from commercial to residential. As citizens of Croydon we should celebrate this fact; pension funds have a low need for liquidity from their real estate investments (as they invest for the long term, given their nature as a pension fund in slowly releasing funds to their shareholders) and therefore we should be confident they are not looking to make a quick buck from redeveloping the site.

In terms of the impact within the centre of Croydon, it seems a large residential area is perhaps needed. Given the centre of town is mostly devoted to offices and in particular retail, drawing in the ‘young professionals, commuters and family’ right into the centre of town can only be positive for local shops and restaurants. It is important also that Legal & General are proposing the former reception/atrium area on the ground floor be turned into retail and community facilities as this will draw consumers to an area of Croydon they perhaps neglected before, and it will allow the residential tower to ‘engage’ with the town – i.e. a private development which contributes to the public space, rather than simply providing a return for Legal & General. Architecturally, too, there is a movement away from the 1960s block into a more streamlined, three tower look which should help modernise the skyline.

The council only needs to look at the Altitude 25 development by East Croydon station to see the mistakes made in building expensive flats

However, it is within the detail of the development where there is cause for concern. It is believed, according to Councillor Jason Perry (Croydon’s cabinet member for planning, regeneration and transport), that the council needs 27,000 new homes across the borough in order to meet demand. The fact that the redevelopment will include 288 of these is good news. Yet within the Croydon Plan, there is a requirement for developments with more than 30 flats to provide 50% affordable homes. Within St George’s House, there will be only 23, far below the required rate. The council’s planning committee has justified this by noting a ‘viability assessment’ was undertaken to validate this allowance.

Now, whilst Croydon should be looking to attract young professionals with disposable income, which the town will benefit from, a balance needs to be struck. Given the tight constraints on housing within the borough, rising prices in a stagnant economy and simply a lack of space, there is a clear argument that more provision for affordable housing should be made in such a large development. This is a great opportunity for Croydon to encourage people of different fortunes into one building and not turn the centre of Croydon into an exclusive area for the wealthy in terms of residence. The council should look at demand, too; whilst there is a clear demand for affordable housing within the borough, the council only needs to look at the Altitude 25 development by East Croydon station to see the mistakes made in building expensive flats. The building is only 25% occupied.

There certainly is an argument on the side of Croydon in allowing St George’s House to provide fewer than the required affordable homes – attracting those with greater wealth will benefit the shops and restaurants of the town, and may improve the atmosphere and nightlife of the area too, and perhaps the council can be justified in wanting to bring greater wealth into the area in this respect. However, to provide such a small amount of affordable housing in a time of austerity, a stretch on housing availability and with the Altitude 25 example, the council should be looking to provide a greater amount than 23. The Nestlé building has so much potential for changing the physical and metaphorical image of Croydon; let’s make it available for all.

Tom Lickley

Tom Lickley

Contributing a variety of roles to the Citizen since early 2013, Tom now focuses upon regeneration, urbanism and real estate writing. He is a strategic communications consultant specialising in the real estate sector, and counts a number of the world's largest investment and fund management companies amongst his clients.

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  • Rosie E

    I think it depends what else is currently happening development-wise in Croydon. I’m wondering whether the building on Prospect West (former BT headquarters but has stood empty for ages) is also being converted to flats? It woud be good if these were more affordable to balance out the Nestle ones.

    • http://www.earth.li/~kake/ Kake

      Vague and possibly unhelpful comment: I think Prospect West is currently being refurbished, though don’t quote me on that — I can’t remember where I read about it. However, last time I went past (a couple of weeks ago) it certainly looked as though there was something going on.

  • http://www.earth.li/~kake/ Kake

    Thanks for this, Tom — very interesting! A couple of questions:

    Regarding the low proportion of affordable housing, you say “The council’s planning committee has justified this by noting a ‘viability assessment’ was undertaken to validate this allowance.” I’m not too clear on what you mean by this; could you explain it, please?

    You also end by noting that this proportion is unjustifiably low — is there anything that can be done about this (e.g. writing to the council) or is the decision now fixed and it’s too late to do anything?

    • http://twitter.com/TomLickley Tom Lickley

      Hi Kake – With regards to the ‘viability assessment’ you may find this useful https://secure.croydon.gov.uk/akscroydon/images/att1617.pdf at point 2.2 – the viability assessment was done by ‘an independent expert on the council’s behalf’ so I do not believe it is available for viewing. Your guess is as good as mine as to what it means, although I’d imagine it examines a cost/benefit analysis to the Croydon Opportunity Area for St George’s House.

      With regards to writing to the council, as permission has already been granted a planning appeal may be a little too late.

      For what it’s worth and on further research I think the Council can actually justify a lower than required provision for affordable housing, it just seems the figure is a little too low. I think greater clarification from the Council is needed on why they have taken this step – i.e. detailing what is in the viability assessment and whether they are placing this share of affordable housing elsewhere in the borough.

      You may also find this interesting – an application from Croydon Council to remove the Croydon Opportunity Area from the government’s plans with regards to converting office developments into residential, in order to capitalise on the investment potential of the town centre http://www.croydon.gov.uk/contents/departments/planningandregeneration/pdf/exemptionapp.pdf.

      • http://www.earth.li/~kake/ Kake

        Thank you for the links! Yes, I agree that a bit more openness on the Council’s part would be good here. In the first document you link to, they seem to basically be saying we should just take their word for it.

        From my reading of the second document, the Council are saying that they think change of use from office to residential should continue to require planning permission in the Croydon Opportunity Area, because they’re concerned that otherwise we might lose too many office blocks — is that right?

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  • Saif

    Tom any update about whether this development is still going ahead? It’s been well over 2 years and no further news.