Transport for London names partner companies for land development drive

The advance of Transport for London (TfL) into the real estate trade has continued with its announcement of 13 “property partners” it will work with in order to make money from its land assets in the capital. They include established giants such as Taylor Wimpey, Land Securities and the Berkley Group along with consortia formed between other commercial outfits and housing associations, for example Barratt Development and London and Quadrant. It’s certainly a big bucks line-up.

The aim is to develop more than 50 TfL-owned sites over the next 10 years or so, producing around 10,000 new homes along with commercial premises, the majority in travel zones one and two. Planning applications have already been submitted for three of the sites: Nine Elms, where a whole new Tube station is to be built, Northwood station and the former London Underground depot next to Parsons Green station. Further sites, not formally confirmed but likely to be on the list, include South Kensington, Bermondsey and Kidbrooke stations and property close to Oxford Circus.

TfL, which intends to retain the freehold rights to all its land, reckons to raise £1.1bn from these development joint ventures on 300 acres of its property, all for reinvestment in the capital’s transport system. There is scope for much more in later years, even though the vast majority of TfL’s 5,700 acres is needed for operational use - it has railway lines and roads running through it. The transport body says it hopes the resulting new housing, shops and offices will help London meet the needs of its fast-growing population. This sounds good enough in theory. How will it work out in practice?

Seasoned readers of this column will be aware of its author’s dim view of a TfL collaboration with a property giant that is already underway. The massive Earls Court Project, which has seen the closure and demolition of the Earls Court exhibition centre, was conceived from 2007 in partnership with local borough Conservatives and Capital and Counties (Capco) - now another of the 13 “property partners” - and has been heartily supported by Boris Johnson.

The scheme as it has progressed so far exemplifies how to do “regeneration” badly, whether you look at the planning processes, the political priorities or the envisaged outcomes. Some of the latter are now in doubt, including as they relate to another piece of TfL-owned land within the masterplan area, the Lillie Bridge London Underground maintenance depot. But the failings of the project as originally approved include provision of an exceptionally low 11% of additional “affordable” housing in the area - all of it from the less affordable part of the “affordable” spectrum - and a general imbalance between very expensive market sale homes and everything else. An entire neighbourhood is being transformed, and not for the better.

However, Graeme Craig, TfL’s director of commercial development, argues that the three future schemes for which planning applications have already been submitted demonstrate a commitment by TfL to finding good combinations of raising long-term revenue for transport projects and changing the nature of locations so that they do a range of other things that London needs. In the recent past he’s acknowledged that exploiting the financial potential of TfL’s most valuable sites “has to be our top priority” but also stresses that he does not intend to “just stack dormitories on top of our stations and leave it at that. We also need to add to what people can get from our buildings and land. I’m keen for every site to be a mixed use development.”

The Nine Elms proposal would generate funds towards the new Northern Line station serving the Vauxhall-Nine Elms area, one of London’s biggest redevelopment sites. There would be 332 dwellings built, of which 25% would be “affordable”. That’s not a big percentage, but expensive market homes make bigger profits and new Tube stations don’t come cheap. In line with Craig’s “mixed use” principle, the scheme would also include 5,332 square metres of office space and 612 square metres of retail plus some public realm provision.

At Parsons Green, the “affordable” housing percentage envisaged is 40% of 119 homes in a development which would also enable the opening of three railway arches for light industrial commercial use. TfL says its plan, which has been set before Hammersmith and Fulham Council, would create 300 new jobs. There is, however, opposition from the Green Party and some of the small businesses currently using buildings there. It’s an interesting case study, to which I shall return.

The 13 property partners have been chosen substantially on the basis that they have the financial and technical resources to deliver complex schemes. Assurances were given at Wednesday’s TfL board meeting that they won’t necessarily be the only companies TfL will tie up with and will be required to vie with each other in “mini-competitions” to get the work on individual sites. Craig repeats that the marking system will put “quality” criteria over “value” by a 60/40 ratio.

Another factor that will influence how TfL’s property venture evolves is, of course, the attitude towards it of the next mayor. Both Zac Goldsmith and Sadiq Khan have spoken frequently about the importance of making the most of TfL land and each will have - or ought to have - their own clear ideas about what exactly that means in terms of revenue streams, infrastructure, affordable housing, community life and so on. “Everything is moving,” Craig acknowledges, and underlines that how TfL’s property operation unfolds in the future will need to be in conformity with whatever Mayor Johnson’s successor does with the London Plan. More on that to come as the mayoral contest intensifies. Yes indeed.