The body overseeing the regeneration of the 57-acre New Covent Garden Market in Vauxhall, will on Wednesday begin a search for a development partner for a £1bn ($1.5bn) residential scheme.

In return for being given the land for one of the largest schemes in London, the partner will be asked to build a new fresh produce market on the site. The area is already the home to the largest market for fruit, vegetables, flowers, plants and other catering produce in the UK. The market moved 35 years ago from Covent Garden to the area, which is part of the wider Nine Elms regeneration project.

Plans for the site are being drawn up by Foster & Partners for mainly residential use, and are expected to attract the attention of the UK’s largest property companies. There are about 20 acres of land available for mixed use development. Drivers Jonas Deloitte, the property agent, will lead the search, with a notice placed to start of procurement process this week.

The Covent Garden Market Authority (CGMA) said that there was a potential to generate a gross development value of £1bn from a high density and mainly residential scheme on land identified as surplus to the market’s needs, including where the current flower market is situated.

The new market would be up to 51,000 sq m and located on the existing main site. This would be built and paid for by the chosen private development partner, but will remain within the ownership of CGMA.

The plans form part of the Mayor of London’s Vauxhall Nine Elms Battersea Opportunity Area Planning Framework. The site is near to the home of the new US embassy in Vauxhall, as well as Battersea Power Station, where there are plans for another large real estate development.

Baroness Brenda Dean, CGMA chairman, said the market will still be their priority “but we have also recognised that we have the chance to build something more here and that without maximising this opportunity we will not reach our final goal”.

Nigel Durman, director of Drivers Jonas Deloitte, said: “Few development sites of this scale in central London ever come to the market. We expect strong interest from the development community keen to get a foothold in this fast emerging quarter of London, which has been overlooked for too long.

“With the recently announced proposals for nearby Battersea Power Station and the new US Embassy, the selected partner will have development rights to a major £1bn mixed use scheme that it can redevelop from circa 2013 onwards.”

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