The £30.6m project to build a new Ovalhouse Theatre in Brixton and refurbish the locally listed Carlton Mansions is expected to be finished by the end of next year.

The work comes as part of major redevelopment plans along the west side of Somerleyton Road, which includes 304 new homes, 50 per cent of which are affordable, and a new nursery.

As well as two auditoriums, the new Ovalhouse Theatre will have seven rehearsal studios, 1300sqm commercial workspace on the top two floors, and a public café on the ground floor.

Ovalhouse will pay for the build costs of the new theatre in a series of payments to the council, documents explain.

The refurbishment of Carlton Mansions, designed by Brixton-based architect Zac Monro, will include 665sqm creative of workspace and the restoration of heritage assets, including the Nuclear Dawn Mural.

Once built, the new theatre will be leased to Ovalhouse for very low rent on a 250 year lease.

“The Council is committing to build the theatre for Ovalhouse and on completion of construction the Council will grant a 250 year lease of the theatre to Ovalhouse.

“In return Ovalhouse are committing to make a series of payments to the Council to cover the build costs of the new theatre and as far as possible will secure Ovalhouse’s funding sources so that the Council can be confident they will contribute to the funding of the new theatre building,”

The lease places the obligation on Ovalhouse to maintain the interior of the space they occupy and to pay a fair proportion of costs for the insurance and maintenance of the exterior and common parts of the building, the documents continue.

Carlton Mansions were used for short-life housing up until 2014, when tenants were evicted.