source: photo: Paul Kroese
Strand East is a neighborhood for 6000 inhabitants initiated, financed and owned by LandPROP (a subsidiary of InterIKEA). The project was conceived as part of the wave of redevelopment that flooded this area when the London Olympics were announced. This mixed-use neighborhood is built with the same middle-class target group as the familiar IKEA stores, but at a new scale: housing, recreational and business facilities will be built on the site of an old industrial terrain. LandPROP is also concerned with creating a strong sense of community in this area, and their long-term interest in the project is evident: all 1200 dwellings will be rental units, with LandPROP as landlord.
In 2005, when it was announced that London would host the 2012 Summer Olympics, a quiet scramble for property began in the East London borough of Newham. The second-most-deprived borough in the country, according to the Economist, is also home to a rich mix of ethnicities (39% white, 38% Asian, 20% black) and boasts the highest fertility rate in England.1 In spring 2012, Newham’s mayor, Sir Robin Wales became the center of a social housing scandal when the borough tried to rehouse 500 families claiming housing benefits to Stoke-on-Trent—a city more than 270km away.
The Borough of Newham already has a 10-year waiting list of some 32,000 people in line for subsidized housing. Relocating the 500 families to Stoke-on-Trent was seen as a way to solve the housing crisis for a few people, in the short term. Fortunately (or unfortunately) for those on the waiting list, Gil Brown, chief executive of the Brighter Futures Housing Association in Stoke-on-Trent, lambasted the relocation proposal from Newham: "We believe [this] signals the start of a movement which could see thousands of needy people dumped in Stoke with no proper plan for their support or their welfare. We have seen in the past relocation putting strain on other services because the medical, education and justice systems are unprepared for an influx of very needy people. The result was huge, unplanned pressure on local services, the collapse of already vulnerable neighbourhoods and the rise of divisive right-wing extremism. We believe that, if London boroughs are allowed to export their most vulnerable and challenging families to cities like Stoke-on-Trent, then exactly the same will happen again."2
The Olympics (and the resulting influx of millions of pounds), has stoked some already smoldering questions about gentrification in this historically blue-collar area. As the post-Olympic sobriety sets in, subsidized housing takes on a new urgency. Moving the low-income families to the periphery of the city has been an ongoing problem for London since Thatcher’s Housing Act of 1980. The neoliberalism policies in place since then have left a vacuum for residents who were previously housed in council estates. As the government has stepped away from public housing, the private sector hasn’t attempted to fill the void. As a result, housing for the upper classes continues to be built, while less wealthy Londoners get progressively relocated further and further from the center.
IKEA proposes to change all this through its real estate development arm, LandProp Holding BV.3 Established in the 1990’s, Inter IKEA’s Property Division is now responsible for more than 318,000m2 in eight European countries: the Netherlands, Poland, Belgium, Lithuania, Latvia, Romania, Spain and the UK.4 In August 2012, the Swedish retail giant announced plans to diversify its real estate portfolio into student housing and budget design hotels. The site of the first hotel has already been chosen in Germany, and about 100 hotels will follow shortly across Europe. The student housing will be focused in Western European university cities and built under the brand name Ulito.
The Strand East neighborhood developed by LandProp follows in the footsteps of earlier IKEA urban planning ventures like the 3,500 BoKlok dwellings built across Scandanavia in the early 2000s. In 2007, 36 BoKlok flats were built in St. James Village, Gateshead. The apartments were aimed directly at lower middle-class families earning between £15,000 – £30,000 per year. The BoKlok designs—unlike what is happening in Strand East—are almost completely pre-fab, and were first sold directly from IKEA stores.
In the current incarnation, IKEA’s pre-fab formula is traded for an urban design by ARC-ML, an international architecture and planning office. The proposed neighborhood will include 1200 new homes for roughly 6000 residents, almost 60,000m2 of commercial space, a special zone for creative industries in the North East Quarter (the area around Dane’s Yard), a “hub area” for local communities and grassroots organizations to utilize, four new bridges, new pedestrian and cycling paths, restored “buildings of note” in the Sugar House Lane Conservation Area, new open spaces, parks and waterfront areas. Housing within the neighborhood will run the gamut from mews homes to maisonettes, duplexes and apartments. Affordable housing will account for 11% of the total available residential area, (subject to grant availability).5
Although there are no specifics available (the amount is said to be somewhere above £25 million for 11 hectares), LandProp Director Harald Müller has made it clear that the land for the development was purchased at "a very interesting low price."6 As reported by CNBC, “Of the total land buy… two big parcels were foreclosures. One foreclosure was bought from a bank, and the other was from the Olympic Legacy Company. Inter IKEA had the advantage of making an equity-financed purchase.”7
The plans were unanimously approved on July 12, 2012 by the London Thames Gateway Development Corporation, following endorsement by the London Borough of Newham’s Strategic Development Committee a week earlier. Both groups applauded LandProp’s “strong emphasis on employment… creative industries… [and] focus on creating a sustainable, vibrant, truly mixed-use neighborhood.”8 The conservation of older industrial buildings has also been a popular approach. As in almost any regeneration plan, preserving some of the historical architecture on a site is seen to lend character to the newly-built sections.
Strand East lies within the district of Stratford (part of Newham Borough), and has quickly become the center of London’s most extensive urban rejuvenation project to date. In this former industrial area, some of the facilities constructed for the 2012 Games will remain in place, including the velodrome, Zaha Hadid’s aquatic center and the stadium. Other areas will be razed to make way for new neighborhoods. The Olympic Village will be lightly renovated into “East Village, with 1379 ‘affordable’ homes and 1439 private homes for rent and sale; beside it, the first spot for development, Chobham Manor (960 homes) will be followed by East Wick (887), Sweetwater (651), Marshgate Wharf (2,665) and Pudding Mill (1709). Traditional family homes have been promised.”9 Although Stratford is still considerably more affordable than central London, local rents have risen about 30% in the last year—though this is expected to equalize, post-Olympics. The area’s facelift includes one of the largest shopping malls in Europe: Westfield Stratford City. The £1.4 billion mall hosts an Apple store, Waitrose and Jamie Oliver’s latest restaurant: Jamie’s Italian. For long-term residents of the area, the development is a far cry from industrial warehouses, dockyards, factories and workers’ housing. Local retailers also say the mall has had a devastating effect on High Street businesses: in some cases, trade is down by 90%.10 The trickle-down effect promised by politicians and developers has yet to happen.
One of the real benefits of the area’s Olympic remodel has been renewed (and new) infrastructural connections. Stratford is now only 15 minutes from central London, reachable by the Jubilee and Central Lines, overground rail and DLR. A new High Speed connection to St. Pancras and Kent add to the area’s appeal.
As a developer, LandProp benefits from all these changes: higher rents, better infrastructure, and a gentrified center that attracts a wealthier population. Because they’ve kept managerial control of the entire project, LandProp will play a pseudo-municipal role. Even the public space will become semi-public, with LandProp having final say over how the spaces can be used and which stores can rent the commercial space. LandProp cites this intimate involvement as proof of its long-term commitment to the project, and indeed, the company seems to be serious about sticking around. According to LandProp Manager Andrew Cobden, “We're not here to make the big profits and walk away, we'll retain ownership of the commercial buildings and we'll continue to invest in the infrastructure.”11 And a note for potential buyers: there is no IKEA in Strand East. The closest store is 20 minutes’ drive away in Edmonton.
1 “Down and out in London”. The Economist. December 31, 2011
2 Bowater, D. “Newham Council accused of 'social cleansing' by moving benefit claimants to Stoke”. The Telegraph. April 24, 2012
3 The holding company for InterIKEA’s Property Division is Vastint Holding, BV, based in Amsterdam.
4 http://inter.ikea.com/divisions/property/, retrieved on August 20, 2012
5 “Affordable housing” is not the same as low-income or social housing. According to the current government, ‘affordable’ rents can be up to 80% of the market value. See: LandProp Holding. (2012). LTGDC and Newham give seal of approval for new neighborhood of high design quality at Strand East. (Press Release)
6 Kane, C. “IKEA is Developing its Own London Neighborhood”. CNBC. Retreived from http://www.cnbc.com/id/45756405/IKEA_is_Developing_its_Own_London_Neighborhood, on August 23, 2012
9 Dyckhoff, T. “Let’s move to Stratford and the Olympic Park, east London”. The Guardian. July 27, 2012
10 “New Olympic Westfield leaves local traders fighting for survival”. London Evening Standard. January 3, 2012.
11 See: http://tegenlicht.vpro.nl/nieuws/2012/april/Strand-East.html, retrieved on August 23, 2012
source: Rachel Keeton