£400m Woolwich project among those set to restart as confidence seeps back into sector

Tesco is planning to restart some of the mixed-use work it had in the pipeline, nine months after it put the bulk of its regeneration investment programme on ice.

In the latest positive sign in the retail market, contractors and consultants in the supermarket’s supply chain have been told some of its mixed-use schemes are to come back on line in the beginning of 2010. Discussions have focused on a number of schemes, which are thought to include the £400m Woolwich regeneration project in south-east London.

The retailer is thought to be re-scoping the schemes to make them more commercially viable, which in most cases is likely to mean a smaller residential element.

A source close to the situation said: “The mixed-use stuff is going ahead. We’ve been told it’s not likely to have as many apartments as the original plans, but this isn’t about reproducing out-of-town formats in urban locations.”

The source added that it was unlikely that plans would be changed enough to require new planning applications.

A consultant who works closely with the retailer said: “It has been reassessing a lot of the bigger mixed-use schemes to see which are viable and which aren’t and the review is due to complete at the end of the year.

“The big issue has been the value of the residential parts and they have looked to see if they can make them more viable schemes, with fewer flats.”

A separate source said Tesco had been in discussions with its partners about taking on the development of the sites as well as the construction, partly in response to the fact that Tesco has lost much of its in-house property team.

In March it cut about 30 jobs from its property development team. The cull included Patrick Stones, who led mixed-use development in London and the south-east. Before then it carried out about £1.4bn of building work in the UK each year.

This is the latest in a flurry of good news for firms working in the supermarket sector. In September, Sainsbury’s said it would extend its £1.6bn store expansion plan for at least another two years beyond 2011, and Waitrose said it planned to double its stores.

Tesco was unavailable for comment.

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