The population of London currently stands at an all time high of 8.6 million, but it is projected to grow even further, reaching 10 million by 2030. The number of people is already putting pressure on housing and transportation in the capital.
Transport for London (TfL) have taken the unique step to become property developers. They will free up over 300 acres of land at 75 different sites for development over the next decade. Each site will then be developed with by specialist firms, creating new homes, retail and office spaces. It is expected that around 10,000 homes can be built across the sites. If the first stage of the project is successful additional land may be freed up in the following years.
Selling land for development will provide a cash boost to TfL in a time when they are facing reduced Government funding. It is hoped the sales will cover these cuts and allow the organisation to continue to make the necessary developments in transport that the growing population requires. The project could feasibly kill two birds with one stone, bringing improved transport and more homes.
The first phase of the project is expected to generate a lot of interest amongst specialist developers. Although the 75 sites have not yet been named, it is expected that a number of high profile central locations will be included as these command the most value. It would not be a surprise to see areas in South Kensington and Oxford Circus become available.
It is expected that there will be strong competition for the sites because land is much sought after in London. Transport for London will award development rights to companies based on the strength of their proposals and the potential for profitability (at a ratio of 60:40). A number of the sites will be sizeable but some will have challenges to overcome because of the location and the current use. Skilled specialists will be needed to take control of them.
It will be interesting to see how the situation develops, which developers get awarded which sites, what the designs look like and how many houses can be built in total, as well as seeing what new opportunities are opened up for property investment in Southwark, South Kensington and other highly desirable areas of the city.