What happens when transport companies dip their toes into the world of property development? Lots of good things, hopefully; and Transport for London seem to agree.
TfL and Property Development
Transport for London (TfL) are scaling up their property development projects and are looking for joint ventures to sink their teeth into in 2015. It’s all about long term income for TfL.
TfL own a lot of land in London, 5,700 acres to be exact, and are looking to maximise the profitability of this land by teaming up with property developers. The company is one of the biggest landowners in the capital, despite much of its land being covered by tracks, but it also owns shops, offices and apartments in a diverse property portfolio.
How TfL goes about this development plan will be announced in a few weeks’ time, but they are likely to appoint a select few private sector partners which they will work with on an ongoing basis. These partners will be announced in November, and will be chosen from companies who are local to the available 50 development sites.
Areas Set to See Investment
There are a number of different sites that may see development thanks to this project. South Kensington tube station is rumoured to be one of these. The Director of Commercial Development at TfL, Graeme Craig, has listed a few others, including:
• Argyll Street
• London Road sidings
• Parsons Green former depot
Do Trains and PropertyDevelopment Mix?
It may seem a bit of a strange mix, trains and houses, but this unconventional love affair could be highly profitable. In fact, it is estimated to bring in around £1.1billion over the next ten years.
However this business plan has not been welcomed with open arms; TfL has recently received disgruntled complaints after its property developments project saw the demolition of the Earls Court Exhibition Centre in order for a village of high priced flats to be built. Something they are working on with Capital and Counties (Capco).
And of the 1,300 properties planned for the site, none are deemed ‘affordable’, creating the question of who these projects are really for: the everyday people of London, or the bosses that will reap the profits?
Issues such as a booming London population and government funding for public bodies have been brought up, but nothing seems to be deterring TfL from their latest idea. The main issue however circles around the conflict of an increased population requiring better transport links that aren’t guaranteed in the future. Many people therefore believe discomfort and fares may be on the rise very soon.
Finance Manager at TfL, Steve Allen, has said: “Bringing together the property development skills with the transport operations expertise and getting those things to work together is what will make or break this venture.”
Craig says: “This is a call to arms to the world of property. We’re saying, ‘if you want to work with us, form a queue here.’” So if you are a property developer in or near London this could be a great opportunity for you.
To find out more about the proposal take a look at their website, or if you’d like to discuss commercial mortgagesor other finance options for your next property investment, give us a call on 02920 766 565.