The scheme is a mixed‑use, marina‑led development delivering approximately 400 residential units, plus retail, leisure, hotel accommodation and new marina infrastructure, with an expected gross development value (GDV) of £300 million.
Acting on behalf of the Local Planning Authority, BNP Paribas Real Estate conducted a detailed review of the applicant’s viability position to determine whether the proposed planning obligations and affordable‑housing provision were justified. The advice provided by BNP Paribas Real Estate enabled the Council to reach a robust, timely decision, grounded in a clear understanding of scheme viability and fully aligned with Local‑Plan policy.
The Challenge
BNP Paribas Real Estate was asked to scrutinise a large‑scale, mixed‑use waterfront regeneration at Town Quay, Southampton. The scheme combined residential, commercial, leisure and new marina infrastructure, each with its own set of cost drivers and policy implications.
Key issues included:
- Significant abnormal and infrastructure costs associated with marina construction and waterfront development
- The interaction between residential, commercial and leisure elements within a single viability appraisal
- The need to test the reasonableness of developer assumptions, including GDV, build costs, finance and developer return
- Ensuring compliance with Local Plan policy requirements, particularly in respect of affordable housing and planning obligations
Because of the scheme’s size and public profile, the Local Authority also needed a transparent, evidence‑based rationale for any viability‑driven departures from policy.
Our Approach & Solution
BNP Paribas Real Estate undertook a comprehensive and systematic review of the applicant’s Financial Viability Assessment.
What we did
- Detailed interrogation of key inputs, including residential and commercial values, build costs, abnormal costs and professional fees
- Benchmarking assumptions against market evidence and comparable schemes
- Review of the developer’s appraisal methodology to ensure consistency with national planning guidance
- Sensitivity testing of key variables to understand the robustness of the applicant’s position
Areas of special focus
- The treatment and justification of marina-related costs and associated infrastructure
- The interaction between different land uses and their respective value and cost drivers
- The level of developer return and whether it appropriately reflected scheme risk
Stakeholder engagement
We engaged constructively with both the applicant team and Council officers, providing clear and transparent advice throughout the process.
Result for the Council
- Clearly understand the viability constraints of the scheme
- Test whether the proposed level of planning obligations was justified
- Make an informed decision on the application in line with policy
Successful Outcome
Our advice provided the Local Authority with a robust evidential basis to progress the Section 106 negotiation element of the planning application.
The outcome ensured
- A policy-compliant decision-making process
- Appropriate scrutiny of viability claims, and
- A balanced approach between scheme deliverability and policy objectives
The instruction supported the progression of a high-profile waterfront regeneration scheme, ensuring that planning decisions were both defensible and transparent.
Lessons Learned
BNP Paribas Real Estate’s instruction for the Southampton Marina regeneration demonstrates the critical role that a robust, evidence‑based viability review plays when a programme combines residential, commercial, leisure and new marina infrastructure. The exercise highlighted three core insights:
- Waterfront developments introduce unique cost and risk considerations that require careful scrutiny
- Mixed-use schemes require a holistic approach to viability, recognising interdependencies between uses
- Early and clear communication between parties can significantly streamline the decision-making process
The engagement also reinforced that Local Authorities need a solid evidential base whenever they consider departures from Local‑Plan policy, ensuring that any such deviation is fully justified and defensible.
