King’s Cross is a mixed-use, urban regeneration project in central London that is also a major transport hub for the city. Located on the site of former rail and industrial facilities, the 67-acre (27 ha) ongoing redevelopment involves restoration of historic buildings as well as new construction, with the entire plan organized around internal streets and 26 acres (11 ha) of open space to form a new public realm for the area.
Principal uses include 3.4 million square feet (316,000 sq m) of office space, 2,000 residential units, 500,000 square feet (46,400 sq m) of retail and leisure space, a hotel, and educational facilities. The site is served directly by six London Underground lines, two national mainline train stations, and international high-speed rail connecting to Paris.
King’s Cross is being transformed from an area once known for lost industry into a vibrant mixed-use city quarter.
Thousands of workers, residents, and students now inhabit King’s Cross, the largest area of city-center redevelopment in Europe.
“We were always struck by how incredible it was that we had 67 acres in one holding so close to the center of the city,” says partner Robert Evans of Argent, the master developer and asset manager for King’s Cross. “The vision was to create a scheme which would be part of London, a busy place with lots going on, somewhere that could always surprise. It would have all the things that any other successful district of the city would have.”
Ten new public squares and 20 new streets will deliver an accessible, high-quality environment with a strong focus on art, culture, and heritage. One-quarter of the development is dedicated to culture and leisure uses, and the first phases are already open to the public.
Before development began, the site consisted of unused buildings, railway sidings, warehouses, and contaminated land, as well as a variety of historic buildings, structures, and surfaces that had survived the site’s former existence as a Victorian townscape. The southern half of the site was densely occupied with structures from the transport hub, including gasworks, gas holders, railways, and storage and interchange buildings.
The project is being developed by the King’s Cross Central Limited Partnership (KCCLP), the collective name for the single landowner that comprises three groups: U.K. property developer Argent (owning 50 percent via Argent King’s Cross Limited Partnership); the U.K. state-owned London and Continental Railways (LCR), holding a 36.5 percent interest; and DHL Supply Chain (formerly Exel), with a 13.5 percent stake. Argent’s subsidiary, Argent King’s Cross Limited Partnership, is developer and asset manager at King’s Cross. It is backed by Argent and Hermes Real Estate on behalf of the BT Pension Scheme.
The development philosophy is holistic, with all the landowners working together within one overarching, shared vision. The stakeholders in the project have remained the same since 2001.
The approved project comprises 50 new and renovated buildings and structures, including 20 historic buildings and structures, 20 new public streets, and ten new public spaces.
The development team viewed gaining planning consent as its biggest challenge. “Sites like King’s Cross are part of a wider debate in the city about how the city grows,” Evans explains. “Will expansion provide for more offices, or housing for the local community? Most agree the answer is both, but the precise combination of that was where attention was focused.”
The permission was innovative because it allowed flexibility of 20 percent variance in the mix of uses within the total floor space. Therefore, total permissible mixed-use development floor space was 8 million square feet (740,000 sq m) across the site, with up to 4.9 million square feet (455,500 sq m) for offices, 494,000 square feet (46,000 sq m) for retail space, and 508,000 square feet (47,000 sq m) for hotels and serviced apartments. Up to 2 million square feet (194,600 sq m) for homes was provided for, and the remainder was to be dedicated to nonresidential institutions and leisure.
Development began in May 2007 after the land was freed from the Channel Tunnel Rail Link works and will continue until 2020. As of June 2014, detailed planning approval had been secured on more than 60 percent of the main development.
The public realm, which will account for 40 percent of the completed site, was fundamental to the master plan from the outset and was the team’s first consideration. “We spent a lot of time thinking about the spaces in between buildings, about how people would use those spaces,” says Evans. “In the early days, we focused on how we would join up the various uses across the entire site and make connections with London.”
King’s Cross was funded through a combination of equity, senior debt, and recycled receipts. The partnership has made a £250 million ($396 million) investment in infrastructure at King’s Cross since 2009, which has unlocked the 6 million square feet (557,000 sq m) of development on the project. The partnership’s equity funding went toward new roads (including King’s Boulevard), new public spaces (including Granary Square), a new bridge across Regent’s Canal, canalside improvements, and the energy center and its associated district heating and distribution networks. In addition, KCCLP entered a £100 million ($158 million) construction contract with the University of the Arts London for its campus.
The equity and recycled receipts have been used to fund infrastructure and incubate projects. About £300 million ($475 million) of senior debt secured since 2009 has been used to fund some of the direct construction costs of the residential and office buildings. This senior debt package, from four leading banks, provided loans for three commercial buildings, the final phases of infrastructure, and 272 apartments at King’s Cross.
The total estimated value, including construction, professional fees, and interest costs, is expected to reach £3 billion ($4.8 billion).
The developers believe they will be rewarded for taking the long-term view and pursuing the project development as a holistic venture. “We did not trade out early, and we will be rewarded for that,” says Evans. He also believes the landowners deserve credit for maintaining their interest. “It would have been easy to see the site as a package of plots to be sold off. But interests have been aligned throughout, and the landowners wanted to be part of what was created long term.” He adds, “We have had to be flexible over our business plans, financial strategy, and the master plan.”
Lucy Anna Scott is a London-based freelance writer and coeditor of Lost in London magazine.
For more information on King’s Cross, including videos, photos, site plans, and financial information, visit ULI Case Studies at www.uli.org/casestudies.