Newham Council has increased the budget for the Bridge Road Quarter development in Stratford by £3.3 million, bringing the total to £91.5 million. The project aims to develop 179 new homes behind The Rex Building.

The decision, made during an Officer Key Decision meeting on Wednesday 2nd July 2025, is detailed in the Public reports pack. The increase was attributed to a reassessment of costs associated with the Building Safety Act following detailed guidance issued by the Health and Safety Executive (HSE) in the first half of 2024. Cost consultants G+T were instructed to update their cost advice and review their prelims allowance.

The council also approved a change in the contracting entity from Bridge Road Quarter Limited (BRQL) to Bridge Quarter Limited (BQL), noting that they have the same owners and it is a minor amendment to fit the Hollybrook group structure.

Additional conditions were added to the Development Agreement, allowing Bridge Quarter Ltd to withdraw if significant ground contamination is discovered or if they do not wish to proceed within 20 working days of a resolution to grant consent. Hollybrook requested this condition, mirroring their land purchase agreement with Morgan Wealth, allowing them to exit both deals if early ground investigations reveal excessive contamination. Populo's desktop Geotech report suggests a low-medium risk of finding contamination. The report also states that the council will not consider additional payments to remediate a 3rd party's land. If Hollybrook exits the deal prior to it going unconditional, the council's deposit is fully refundable.

To mitigate the increased build cost, Hollybrook agreed to cap construction inflation at 6%, sharing the risk with the council. A change in the affordable housing tenure mix is also planned, maintaining 36% affordability but shifting 20 homes to an intermediate affordable housing product, modelled as Affordable Rent.

The council has included a clause allowing Hollybrook to withdraw from construction if inflation exceeds the cap, with Newham Council obligated to purchase all land parcels with planning permission for £9 million. The council considers this an agreeable risk-sharing mechanism, citing recent local transactions such as the sale of Queensbridge Quarter and Stratford Mill to Greystar as justification for the purchase price. Specifically:

  • Queensbridge Quarter (Buzz Bingo) sold for more than £20m without planning permission, but estimate 350 residential units (£57k/plot)
  • Greystar acquired Stratford Mill for £20m with consent to build 245 residential units (£81k/plot)

Several key risks associated with the project were identified in the Public reports pack, including potential cost increases, Hollybrook's insolvency, and securing planning permission. Mitigations are in place, such as fixed build costs subject to capped inflation and the ability for the council to step into the building contract.

The Rex development is expected to contribute to the council's target of starting to develop at least 1,500 new homes by 2026, including 1,000 at social rent levels, as outlined in the Corporate Plan 2022-26, Building a Fairer Newham. It will also contribute to the regeneration of Stratford, securing local labour and apprenticeship opportunities through Section 106 agreements.