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Earls Court regeneration value drops again
A regeneration scheme in Earls Court has continued to fall in value as London mayor Sadiq Khan said his “patience is wearing thin” with the developer.
Capital and Counties (Capco) revealed in its results for the calendar year 2018 that the value of the development had fallen to £658m, down 15.6% from last year’s valuation of £759m.
The scheme includes the West Kensington and Gibbs Green estates, which have been the subject of a political battle for the past seven years.
Mr Khan told the London Assembly earlier this month: “As I made clear in November last year, I want to see the West Kensington and Gibbs Green estates handed back entirely to the London Borough of Hammersmith & Fulham ahead of alternative plans being progressed and determined.
“I understand that since then Capco have suggested they would make the transfer of the estates conditional on a performance agreement and receipt of an acceptable planning permission. This is not acceptable – and my patience is wearing thin.”
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According to the mayor, Transport for London has said that progress depended on Capco transferring the homes back to the council.
As well as the political battle, Capco’s scheme has suffered as a result of a difficult London housing market.
The value of the scheme has been falling for two years, and in March last year the developer sold part of the scheme – a 31-storey building called Empress State Building – to the Mayor’s Office for Policing and Crime for £250m.
Ian Hawksworth, chief executive of Capco, said: “Economic and political uncertainty have continued to impact the London residential market, resulting in a further valuation decline in our investments at Earls Court.
“The land benefits from an in-place planning consent and is now available for development which is expected to be brought forward through the introduction of third-party capital.”
As the rest of the scheme has continued to fall in value, Capco has explored alternative strategies for dealing with it.
In its results, it said that during past year the company “advanced its preparations for a possible demerger”. This would see the Earls Court scheme launched as its own company, separate from the more profitable Covent Garden scheme.
Capco also said it “has received a number of proposals in relation to the sale of certain of Capco’s interests in Earls Court”.
The company confirmed in November last year that it was in talks with a Hong Kong property firm over the potential sale of the site.
