The 02 Centre in Finchley Road

A MULTI-MILLION pound refurbishment of a shopping centre announced this week has cast doubt on a developer’s long-held ambition to replace it with hundreds of homes.

The director of the O2 Centre in Finchley Road said the refurbishment would “breathe new life” into the building and “invest in its future” while ensuring it “remains open throughout the programme of works”.

The VUE chain has recently completed a major revamp of its cinema screens and seating on the first floor while the luxury Third Space gym chain has just moved into the ground floor.

A sports centre with 10 padel courts has opened on the land in the O2 Centre car park, where 600 homes were originally supposed to have been built this year.

The announcement of a refurb and the delays to the home-building have raised questions about how long Landsec’s £1.2billion, 1,800-home “masterplan” could end up being stalled for – and whether this compromises the basis of a recent planning decision to approve a reduction in affordable housing on the site.

Last Christmas, Mayor of London Sadiq Khan and the Labour government announced a temporary scheme to help developers in charge of stalled housing projects “get building” by allowing them to slash the proportion of affordable homes.

It led to Landsec applying for amendments to previously approved plans and Camden Council agreeing that they could cut the proportion of affordable homes from 35 percent to 20 percent.

Keith Moffit, chair of the West Hampstead Neighbourhood Development Forum, said: “It’s pretty outrageous that Landsec has managed to get approval under a temporary scheme to boost house building in London for an amended planning application that reduces affordable housing to 20 percent for the whole of the master plan site where it’s evident that much of that development is unlikely to be made in the near or even medium term future. The improvements to the O2 centre make this all the clearer.”

The 02 Centre is due to get a new look

Landsec’s amendments, which significantly increased the number of homes for sale at the expense of affordable homes, were approved on “viability” grounds.

The developer had argued it could not make an acceptable profit with 35 percent of the homes classed as “affordable” due to rising costs and fluctuations in the financial markets.

But in the planning documents there was no detailed explanation of this and no new viability assessment was submitted to the Town Hall.

Jill Henry, who lives in West Hampstead, has looked at investment statements made by the company over recent years.

She said: “What particularly caught my interest was an earlier Landsec investor presentation from May 2025, which listed Finchley Road itself as approx. £1.2bn project with an indicative 10–12 per cent return. That was when the revised application was still proposing around 35 per cent affordable housing.

“I appreciate that corporate finances, investor return targets and planning viability are not the same thing, so not suggesting they are. But the contrast between the language being used with investors and the viability case before Camden seems worth exploring.”

In 2022, Landsec said the first phase of the scheme would be completed by 2026, with the final phase finished in 2033.

The target date was then put back two years in 2024.

In January this year, it said it intended to transform the site “in the next decade”.

Announcing the revamp of the O2 Centre this week, centre director Ant Foran said: “We are driven to continue to invest and breathe new life into the O2 Centre, evolving it into a more vibrant space for everyone. That means improving the public spaces, bringing forward new leisure and hospitality offerings, and creating a stronger mix of experiences for the local community.

“Crucially, the O2  Centre will remain open throughout the programme of works, and we are committed to making sure it continues to serve the community.”

A Landsec spokesperson said an updated timetable would be announced “in due course”, adding: “The O2 Centre itself and a large part of the car park will remain open for a number of years, in line with the phased nature of the O2 Centre Masterplan.

“In the meantime, we’re continuing to invest in and revitalise the O2 Centre so that it remains a vibrant place for the community, and this announcement is an exciting step forward in that process.”