L&G, PGGM and Nest have exchanged contracts with the NHS to acquire a c.2.4-hectare brownfield site in south London, earmarking €415m to deliver approximately 700 rental homes in one of the capital's most supply-constrained boroughs. The site, formerly occupied by Lambeth Hospital between Clapham, Stockwell and Brixton, is the second UK acquisition made through the Access Development Partnership (ADP) within a year, reinforcing the role of long-term pension capital in tackling a deepening housing crisis.
The scheme could not arrive at a more critical juncture. Rolling annual construction starts in London fell to their lowest since 2010, with 23 of 33 boroughs recording no new starts in Q1 2025. Across England, net additional dwellings declined to 208,600 in 2024/25, a 6% year-on-year drop and the lowest figure since 2015/16. UK private rents rose 7.7% year-on-year to March 2025, and while rental growth eased slightly in late 2025, supply remains acutely constrained. For investors and developers, this signals that well-capitalised, multi-phase brownfield regeneration schemes in inner London, capable of delivering through market cycles, represent a structurally compelling opportunity in the current environment.
The mixed-tenure masterplan, designed to include affordable and private rental homes alongside co-working areas, a residents' lounge, gym, green spaces and improved active travel connections, is expected to pursue an all-electric design. Proceeds from the NHS land sale will be reinvested into the €220m programme to modernise mental health facilities, including the new purpose-built New Douglas Bennett House on the Maudsley Hospital campus at Denmark Hill. Planning permission for the site was originally granted in December 2021, with L&G expecting to consult on modest refinements to the existing consented scheme.
"The redevelopment of the Lambeth Hospital site is a flagship example of the power of pension capital to address the chronic lack of housing supply by delivering large scale schemes in the areas that need them most, whilst also meeting the investment needs of our Pension Fund clients," said Dan Batterton, Head of Housing, Asset Management, L&G. "Underpinned by long-dated institutional capital, L&G is able to look beyond short-term market cycles and commit to multi-phase regeneration, giving partners and local authorities confidence in delivery at scale over the longer term."
Dirk Bootsma, Senior Director, Private Real Estate, PGGM, added: "The acquisition of the Lambeth Hospital site is a great addition to our Residential development partnership with L&G. This underlines our commitment to deliver strong financial returns for the participants of our client Pension fund Zorg en Welzijn (PFZW). We see the social value of realising new, high-quality rental housing as an additional benefit that fits with the investment philosophy of PFZW." Matthew Forward, Senior Investment Manager, Real Estate, Nest, noted: "We're really pleased to be embarking on this next investment, building on a partnership that aligns closely with Nest's long-term approach to real estate. The scheme will support the provision of affordable homes for social rent, helping to encourage a broader mix of housing in Lambeth. At the same time, the all-electric design reflects our commitment to lower carbon living and to backing high-quality, future-ready homes."
This marks L&G's 26th BTR acquisition, bringing its total deployment in the UK BTR sector to over €4.7bn across more than 10,000 homes, including 2,000 in London. For developers and institutional investors watching the market, the ADP model, which pools long-term pension capital from Dutch and UK pension funds alongside a specialist operator, offers a replicable blueprint for unlocking strategic NHS and public sector land disposals, a pipeline that remains significantly underutilised across English cities.
People mentioned
- Dan Batterton, Head of Housing, Asset Management, Legal & General
- Jane Bailey, Chair, South London and Maudsley NHS Foundation Trust
- Dirk Bootsma, Senior Director, Private Real Estate, PGGM
- Matthew Forward, Senior Investment Manager, Real Estate, Nest
Companies mentioned
- Legal & General (L&G), UK financial services group and BTR investor, developer and operator
- PGGM, Dutch pension fund service provider and co-investor via ADP
- Nest, UK's largest workplace pension scheme and co-investor via ADP
- Access Development Partnership (ADP), joint venture between L&G, PGGM and Nest mobilising pension capital for UK BTR delivery
- South London and Maudsley NHS Foundation Trust, vendor of the Lambeth Hospital site and beneficiary of land sale proceeds
- NHS, public sector land vendor
