COMMENT In an interview with EG this week, London mayor Sadiq Khan says he wants to work with developers. “It’s not a battle,” he says. “What I’ve been impressed by is the willingness of developers to work with us. It’s in all our interests to make sure we meet London’s housing need.”
In the normal course of events, platitudes like that wouldn’t matter. But Khan’s dealings with this sector have been famously detached, so his words here carry extra weight. The optimists among us – and I count myself as one, most days – might read this as a statement of second-term intent.
That’s not blind optimism, there’s logic too. Last autumn, Khan secured the Labour ticket for next May’s election and is now perhaps a little less beholden to the left of the party. He also has some big housing targets to hit, targets that won’t be met without what he describes as “teamwork between developers, those in the real estate industry, councils and City Hall”.
Clearly words are not enough. And there is no shortage of boroughs where Khan could demonstrate he is willing to act.
“Old Oak Cock-Up”
Take Old Oak Common. Developing this £26bn west London regeneration opportunity was never going to be easy. And so it has proved. This week the area’s most significant private sector landholder, Cargiant, called for a public inquiry into the area’s regeneration plans, which it claims are an “unprecedented waste of public money”. Managing director Tony Mendes was incensed: “Old Oak Common is fast becoming known as Old Oak Cock-Up”.
Khan’s response to this outburst was no more measured. “These comments are barely worth the paper that they are written on,” said a spokesman. “The mayor would be letting down Londoners if he allowed private sector vested interests to get in the way of the homes and jobs that Londoners need.”
Behind the public mud-slinging are ongoing meetings between officials on both sides. But resolving their differences will be a real test of the teamwork which Khan describes.
Earl’s Court stand-off
Then there is Earl’s Court, where a stand-off between developer Capco and Hammersmith and Fulham Council has stalled the project. Progress will require one or both sides to make significant concessions. The prospects appear low.
That may change after Capco’s results at the end of the month, in which it is expected to confirm the next steps in its plan to split the Earl’s Court and Covent Garden businesses.
Whether that split results in two standalone listed vehicles or in one of the parties interested in the Earl’s Court assets – Hong Kong’s CK Asset Holdings is still in the frame – pursuing an acquisition, it’s conceivable that a new entity will be able to engage with the council on different terms. Again, it will require teamwork, and almost certainly the involvement of the mayor’s office to find a path forward.
It’s not just Earl’s Court and Old Oak Common. This week Grosvenor’s proposed £500m build-to-rent scheme in Bermondsey was rejected by Southwark Council on the grounds that the 1,300 homes would not be affordable enough. Khan has the power to overturn the decision.
Developing in London is a high-stakes game, and the consequences of failure or success profound. It will take teamwork to get it right. And it will require a team captain. The obvious captain is the mayor. If, as is likely, Khan is re-elected, will he wear the armband and lead?
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