The capital’s transport body has chosen some of its most valuable sites to lead the way in exploiting its land assets
Transport for London’s journey towards becoming a major property developer in the capital has reached another milestone with its announcement that over 300 acres of its land comprising 75 sites will be made available for the building of homes, shops and offices over the next ten years, of which 200 acres will be in the highest value travel zones 1 and 2.
Back in January, the transport agency said that up to 50 of its sites would be picked for the first phase of the programme for redevelopment in partnership with between three and six specialist firms, and that another 25 would be developed with others outside that group or in some cases potentially sold. The selected panel of “property partners” will be made known in the New Year and might end up including more than six. It’s all terribly businesslike.
A big reason for putting so much of the most valuable, “prime central” land forward right away is simple. “It’s money,” says TfL’s Director of Commercial Development, Graeme Craig. “That has to be our top priority.” He expects this first phase of development to generate £1.1bn for TfL, all of it to be reinvested in a transport network that must cope with a projected London population rise from the current all-time high of 8.6 million to 10 million by 2030 while, at the same time, its funding from central government is falling.
While £1.1bn by 2025 isn’t a transformational sum in the context of an annual, overall budget of £9-£10bn, like every public body in London, from the Met to the boroughs to the fire service to the NHS, TfL is seeking to exploit its land assets to help cover the cost of austerity.
Not everyone is comfortable with this. But if you want more Tube capacity, better buses and the lowest feasible fares any time soon, you might have to put up with Craig and his colleagues climbing aboard some special purpose vehicle with the sorts of suits who go to MIPIM. A further £2.3bn is expected to be raised from other commercial activities during the same period.
None of the first phase sites have yet been formally named, but it will be quite a surprise if the environs of South Kensington station aren’t among them, along with a couple of blocks near Oxford Circus, the top of Bermondsey station and less rarefied Tube locations including Kidbrooke and Northwood. A public consultation is taking place about the best thing to do with the disused Parsons Green depot.
Craig says there will be a “mini competition” between the members of the “partnership panel” to allocate the first phase sites, with the quality of their proposals mattering more than their profitability by a ratio of 60 to 40. He stresses that many of the early sites will be in large yet “complex and constrained” locations, requiring maximum resources and know how if a pleasing result is to be achieved.
Once arrangements have been made for the first 75 sites, TfL intends to move straight on to finding candidates for a second phase, more of which will be in the outer zones. Meanwhile, it has already separately entered into a joint venture with Development Securities to build over 300 residential units plus shops and restaurants above and around Southwark station. Before that, there was the (deeply unappealing) deal with Capital and Counties over Earls Court.
Craig says that the first 300 acres could help deliver 10,000 new homes, but the burning political question is, of course, who will be able to afford them? Maximum profit tends to mean minimum affordability, though Craig says there will be “an affordable element” in phase one. How large that is and the form it takes will partly depend on the attitude and approach of the local authorities from which planning permission will be sought.
It will also depend on the preferences of the mayor, who will be a different person from the current one come May. With housing topping the policy agendas of all pretenders to the City Hall throne, TfL land has already featured prominently in the debate, with Conservative candidate Zac Goldsmith and Labour peer Andrew Adonis, who was an active supporter of Tessa Jowell in their party’s selection race, highlighting how much of it there is and its potential.
“TfL owns 5,700 acres of land — nine square miles, larger than the entire London Borough of Camden,” wrote Adonis back in June. In fact, quite a lot of that land can’t be used for building on. That’s because it has useful things like railway lines and 580 kilometres of road on it. Still, that Camden parallel has certainly had legs. “Through TfL the Mayor owns enough land to fill the entire London borough of Camden – home to more than 240,000 people,” Jowell echoed in September, shortly before her defeat by Sadiq Khan. “Put together, land owned by Transport for London would be bigger than the Borough of Camden,” Goldsmith told the Tory conference two weeks ago, as he’d been telling anyone who would listen in the days following his easy triumph in his party’s selection contest.
Not for the first time, Goldsmith seemed to have been reading from Adonis’s script. If he’s going to keep that up he’ll need to splash out on a clever scribe to put the Labour lord’s words into some he can pretend are his own unless he wants to have his leg pulled about plagiarizing the opposition peer from now until polling day. Whatever, arguments about the best use to which TfL land should be put can be expected to frequently recur over the coming months. What should the balance of priorities be? Maximum profit for maximum transport gain, or maximum housing affordability? Discuss.
Ref: The Guardian
www.investinbuytolet.com – UK Buy To Let Property Investment Specialists
Invest In Buy To Let source high yield buy to let properties in areas of growth, find tenants and manage them thereafter.