The branching out of TfL

In a modern world developers are appearing in the most unlikely places. Take Transport for London (“TfL”) which due to its original structure has a large amount of potential prime sites within London for development. TfL has so far identified 75 sites which will have an eventual value of £3.6bn. The challenge to TfL, like others, is that it is not a development company – so how can you maximise the value, well simple – have a development agreement with someone who can develop a site.

This is the beauty parade of all parades. So far 13 companies have been shortlisted to develop the 75 sites and for those looking for a steady income stream could easily secure that here. In terms of the sites, well zones speak louder than words – 300 acres in zone 1 and 2 capable of delivering around 10,000 homes and 10 million ft² of commercial space. With this much value, would it not be appropriate to simply become a development company.

Imagine, a transport business being responsible for 10,000 new homes in central London. Well if they partner well they could create some great spaces generating a significant amount of income to be reinvested in the transport network. Clever isn’t it – maybe they could lend some to the regional train networks.



I was discussing some of sites recently in London and they are standard and unusual. It would be good to see the Victoria coach station redeveloped into commercial and residential units but apparently even a roundabout is up for grabs – fancy living on a roundabout? Quirky but would be a unique design to see what you could do to make money from it. So far TfL has submitted planning applications for a mixed-use development of a former Underground depot at Parsons Green and schemes on top of the new tube stations planned at Northwood and Nine Elms. This seems the key – build on top – land is limited, so why not reach for the sky.



What is pleasing to see is how they developments will work – joint ventures – so good to see TfL not selling off for a small profit rather than waiting for the large prize. Now okay values can go up as well as down but if sensible this will provide a steady income stream to TfL replacing its prized government funding. TfL then plans that it will either make money from the development sale but hopefully retaining some for rental income.



Overall this will hopefully demonstrate to other public bodies that they can work with the private world to utilise the assets they have and generate a better return – just think of large land owners such as the NHS. The approach taken, through a partnership approach has all of the potential to deliver high-quality places and the 75 sites are just the beginning.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

 

Enjoy the weekend

Lee