Knight & Lee project could change hands after years of delays

The former Knight and Lee John Lewis branch on Palmerston Road has been closed since 2019.

Developers THATgroup secured planning permission in 2022 to redevelop the former department store into a mixed-use development. Proposals included a hotel, cinema, offices, a gym, shops, food and drink venues, an indoor food market and a rooftop bar.

The project has been the subject of anger and disappointment in recent years due to a lack of progress on site.

However, Steve Pitt, leader of Portsmouth City Council, told the Local Democracy Reporting Service that the developers, THATgroup, are likely stepping away from the project.

He confirmed THATgroup has notified the council that they are in negotiations to transfer the site to another developer, which he understands could happen “soon”, although no formal timescales are in place.

Local councillors and Stephen Morgan have been vocal about the lack of progress, with Mr Morgan going as far as launching a campaign.

Frustrations intensified in May 2024 when the council leader suggested intervening to ensure progress on the site. The MP’s campaign was launched in October 2025.

Developers THATgroup have failed to respond to all enquiries made by the Local Democracy Reporting Service to date.

Mr Morgan said: “I share the frustrations of local people and our city’s businesses over the lack of action on the much-cherished former Knight & Lee store.

“That’s why I’ve been convening a task force bringing traders and local businesses in the area together to drive improvements in Southsea’s shopping precinct calling on the council, police and others to take seriously ideas and concerns shared.

“Over 1,300 people signed my open letter to the developers of the former Knight & Lee store calling for action to finally restore this gem on our Southsea’s high street.

“When so many local businesses are working hard to smarten up Southsea and contribute to our local economy, the current state of the building is a blight on our community and letting our city down.

“Whoever owns the site, I will continue to work with others to ensure progress on the site. Authorities should use all powers available to them to bring this about”.

The Knight and Lee department store, one of just two John Lewis shops in the UK to keep its original name, was the first the retailer had closed since 2006. At 35,000 sq ft, it was the smallest full-range department store and proved difficult to modernise.

Originally opened in Southsea in 1865, it was taken over by the John Lewis Partnership in 1933 and closed on 13 July 2019 after more than 150 years of trading.