Tesco to build 4,000 homes rather than supermarkets

Tesco is planning to build 4,000 new homes in the UK on land previously earmarked for new supermarkets.

Britain’s biggest retailer has dramatically scaled back its expansion plans in the UK and now plans to use some of its vast land bank to build homes.

Tesco has previously been criticised for hoarding land in the UK. It is estimated to own enough unused land to build 15,000 homes, roughly the size of the Coalition’s proposed garden city at Ebbsfleet. However, its housebuilding project will in part help to ease a housing shortage in the country.

The company is yet to decide whether it will build the homes itself using in-house developer Spenhill, or sell the land to house builders

The initiative will be the biggest housing project in the history of Tesco.

According to Property Week, the company has scheduled that 4,000 homes will be built on its land by 2017. This will primarily be in south east of England, with schemes in Welwyn Garden City and St Albans, although developments are also planned in the north and west of England.

A Tesco spokesperson said “We are currently working on plans for over 4,000 homes across the UK, either by building them ourselves or selling our sites to housing developers. In places where we have already delivered housing schemes, for example in Faversham or Highams Park, the feedback from local communities and Councils has been very positive.
“We are pleased to be bringing new investment to communities up and down the country and playing our part in meeting local housing needs over the coming years.”

Last year Tesco wrote down the value of its land by £800m after admitting that it would never build on much of the land it had acquired. The company decided it would not press ahead with 170 projects that had been earmarked for 5m sq ft of space.

Philip Clarke, chief executive of Tesco, has called an end to the supermarket “space race” and is instead focusing investment on smaller convenience stores and digital venture.

Sales in traditional out-of-town supermarkets are declining as British shoppers turn instead to convenience stores, online retailing and the German discounters Aldi and Lidl.

As a consequence, Tesco is revamping its existing hypermarkets by installing restaurants, coffee shops and bakeries, but also slowing down its stores opening programme. The company has 3,400 stores in the UK, of which 247 are Tesco Extra hypermarkets and 482 are traditional Tesco supermarkets.

The company said: “As we have previously announced, in response to changing customer shopping habits we have decided to reduce the amount of new store space we build each year, building fewer large stores.

“Where we no longer intend to develop sites, we sell them, lease them or develop them for housing.”

Source: Graham Ruddick - The Telegraph
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10976120/Tesco-to-build-4000-homes-instead-of-supermarkets.html