The Ministry of Justice has agreed a deal to sell Holloway Prison in Islington, N7, to residential developer London Square and housing association A2Dominion.
The 10-acre site, on Parkhurst Road, could provide more than 1,000 new homes, of which 50% would have to be “genuinely affordable”. It is estimated the built out scheme could have a gross development value of £500m.
The sale of the Victorian prison, which became the largest women’s jail in western Europe before it closed in 2016, is the first since former justice secretary Michael Gove announced in 2015 that he planned to close inner-city prisons and sell sites for housing, reinvesting profits to help build nine new jails.
Potential future prison sales in London which could release land for housing include Brixton, SW2, Pentonville, N7, and Wormwood Scrubs, W12.
The deal is the first joint venture between London Square and A2Dominion. Ares Management acquired the majority stake in the London Square in 2014 for around £110m.
The developer has since acquired sites in Neasden, NW10, Lewisham, SE13, Wandsworth, SW11, and Tadworth, Surrey. It also recently submitted plans for 640 homes near the Olympic Park, E20, alongside BMOR.
A2Dominion, which owns or manages more than 37,000 homes across London and the South East, announced this month it had secured a £150m funding stream though three loans from MUFG, BNP Paribas and HSBC, adding to its £1.9bn funding portfolio.
The Holloway Prison site is expected to provide up to 50% affordable housing, according to a supplementary planning document drawn up by Islington Council.
The document, published after an extensive community consultation, was created to provide clarity to the winning bidder, setting out clear parameters of what it expects to be delivered. Other demands included providing high-quality, publicly accessible green space as well as social infrastructure such as a centre providing rehabilitation and support functions to vulnerable women.
The site is a stone’s throw from the former Territorial Army Centre in Islington, which was at the centre of a legal dispute between developer Parkhurst Road and Islington Council earlier this month over how affordable housing quotas and viability should be calculated.
Islington argued the developer should provide 34%, as opposed to the developer’s proposed 10%, because the site value needed to consider the borough’s 50% affordable housing target in its development plan.
A high court judge ruled in favour of the council, with the decision expected to have widespread ramifications for viability assessments across London.
The Holloway decision comes after the Greater London Authority, led by London mayor Sadiq Khan, this week laid out plans to take an interventionist approach to land assembly in order to boost affordable housing in the capital.
Islington’s housing policy was previously overseen by James Murray, who was a councillor before his appointment as London’s deputy mayor for housing in 2016.
GVA is advising the Ministry of Justice.
Holloway Prison
Known locally as “Camden Castle”, the prison opened in 1852 as a mixed-gender facility but evolved in 1903 to house only female prisoners, becoming the largest female prison in Western Europe.
The prison is offered with full vacant possession, after being vacated by September 2016.
Proceeds from the sale of the site will contribute to the MoJ’s prison reform programme, which is intended to provide significant investment in modern, purpose-built prison facilities.
Planning documents have suggested the site could accommodate 1,000 homes, of which 50% would need to be affordable.
The developed site could have a gross development value of circa £500m.
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