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As solutions for the UK’s pressing housing crisis continue to be sought supermarket chain Tesco is planning to turn some of its largest urban supermarkets into mini-Tesco villages containing hundreds of homes.
The plan involves utilising ‘air rights’ over relatively low flat roof buildings – many of which were built during the 1960’s and 1970’s to create numerous sites for new homes.
The chief executive of Britain’s largest supermarket chain, Dave Lewis, is working on the bold plan to overhaul its vast store estate, which analysts say could raise £1.5bn for the retail business.
According to the Daily Telegraph, a scheme with property developers to build hundreds of flats on top of its superstores and store car parks is central to the proposals.
Commenting on the project Alan Stewart, Tesco’s chief financial officer said, the sale of Tesco’s so-called “air rights” could generate around £400m and could provide a solution to Britain’s housing crisis. A further £1bn-plus is expected to be raised from offloading land and excess space in its stores.
Tesco and several other major supermarkets are in discussions with property developer Apex Airspace about building homes on top of their stores. Tesco has already identified 15 sites, most of which are in London, with another in Oxford.
Air rights, a relatively new concept in property circles, involves selling the rights to build over retained land on a long leasehold basis.
Typically, flats are built on top of existing buildings. Recent developments have involved flats being constructed off-site, then crane-lifted into place on a building.
The economic argument is compelling. Land prices in London can be 80% of the cost of building a home and air rights homes are cheaper than comparably located conventional homes.