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A stalled regeneration scheme in Earls Court has further dropped in value, this time by 12%, the developer on the scheme has said.
Capital & Counties (Capco), which had planned to demolish two estates in the area, reported in its results for the year ending 31 December 2017 that its interests in Earls Court are now valued at £1bn, down from £1.1bn.
It is also in discussions to sell part of the scheme, the Empress State Building, to its current occupant, the Mayor’s Office for Policing and Crime. The building is valued at £220m, which could help mitigate Capco’s losses.
This fall was driven, the developer said, by “the valuer’s more conservative view on gross development value and the cost of delivery, together with recent transactional evidence in the land market”.
Yesterday Andy Slaughter, the local Labour MP, told parliament: “Capco’s assumptions for residential value, which are significantly higher than the local market and schemes elsewhere in London, have not been realised.
“Unsurprisingly, Capco has tried in recent months to sell some or all of the site to overseas investors in America, South Africa, Japan, China and Saudi Arabia, but it has had no takers. Frankly, any developer, however much of a gambler, would be beyond reckless to take any of the Earls Court site off Capco’s hands.”
Ian Durant, chair of the company, said: “Economic and political uncertainty has impacted the residential market in London, resulting in a further decline in the valuation of our investments at Earls Court.”
The scheme has been in difficulty for some time now. It declined in value from £1.3bn to £1.1bn this time last year.
Meanwhile, political will has turned against the demolition of the West Kensington and Gibbs Green estates, with Hammersmith & Fulham Council demanding the return of the estates.
Capco still has planning permission to deliver 7,500 new homes on the site, and last month completed the demolition of the nearby exhibition centres.
The council, however, has called the scheme “undeliverable”, criticising “the proposed level of density and affordable housing”.
Ian Hawksworth, chief executive of Capco, said he was pursuing “discussions with London Borough of Hammersmith & Fulham regarding the possibility of the council taking the lead on future plans for the West Kensington and Gibbs Green estates”.