The project will see Kier Construction modernise Epsom station in Surrey as part of a £31m retail, hotel and residential development.

Network Rail and Kier’s Property arm are working in partnership to provide Epsom with 54 affordable flats for developer Orbit Homes, a further 63 private apartments, and a 64-bedroom hotel along with a local convenience store.

The private element will fully fund big improvements to Epsom station, including a new ticket hall, car park and additional canopy coverage on both platforms.

The job is the first to come from Kier and Network Rail’s property partnership company, known as Solum Regeneration, which was set up two years ago to regenerate a number of railway stations in the south-east of England.

Initially, seven sites at Enfield, Maidstone East, Twickenham, Walthamstow, Wembley and Guildford have been allocated for regeneration and will form the basis of a ten-year, estimated to be worth £500m.

Network Rail’s director of property, David Biggs, said: “Tough market conditions have meant getting this project off the ground has been a challenge but we’re extremely happy to bring this investment to Surrey.

“Working in partnership with developers such as Kier and Orbit Homes allows us to make the most of our unique station locations for sustainable development opportunities.

He added: “With over 2,000 stations serving as the gateway to all our major towns and cities across Britain, we are always looking for new opportunities to bring maximum benefits to our passengers.”

Orbit Homes will pre-sell the affordable shared equity units and let the affordable rented units in accordance with the lettings protocol of Epsom and Ewell Borough Council, while the private homes go on sale in 2011.

Kier Property commercial director, Nigel Turner, said: “This is Solum’s first scheme on site since establishing the business in 2008 and proves that the partners’ investment was well directed.

“We have the skills to knit together a complex mix of uses and deal with the complexities that the railway environment brings to a scheme.

“This is a blueprint we are rolling out across the Solum portfolio where we have planning applications already submitted at Walthamstow and West Brompton.”

Kier Group is constructing the scheme following a competitive tender process. The station will be complete by Christmas next year and all works will be finished by the summer of 2012.