Transport for London is considering building and holding thousands of homes for the private rented sector as it works up disposal plans for its London property portfolio.
Graeme Craig, commercial development director at TfL, said: “I am sure we will become a significant PRS player in the future. Given the quantum of sites we are talking about, particularly if you are thinking about zones 3/4/5, even some sites in zones 1 and 2, we are confident PRS is part of the mix.
“Whether we do that ourselves or through joint ventures – I think there is an argument both ways – I am sure we will become a significant PRS player, because that very much plays into what we are seeking to concentrate on, which is long-term income.”
TfL has revealed that it is to release more than 300 acres of land, two-thirds of which are in zones 1 and 2, that have the potential to create 10,000 homes.
It is currently drawing together a development panel to be used on the first 50 of those sites, which will be revealed in the new year.
Craig said TfL is considering the best value development options for its disposals, depending on market conditions, location and timing, as well as future ownership and development structures, partnering on some, selling others, and developing some outright.
When asked whether TfL would set up a separate company to manage the sites, Craig said: “There are legal reasons as to why setting up separate companies is helpful. I am attracted to the notion of doing these through joint ventures, we retain a degree of control but we also leverage the skills of the private sector.
“Through the property partnerships, there will be some cases where we develop out sites, take receipts in the form of capital receipts, in some cases we will retain ownership. In some cases I think we will capture our proceeds in the form of buildings that we will put into another vehicle that we will have set up.”
TfL is ramping up its operational capacity as it prepares to begin developing and disposing of land.
It has expanded its development team from five to 15, and has recently hired Chris Townend from New Covent Garden Market and Daniel Lovatt from Deloitte. TfL plans to expand its team to 29 by the end of next year.
When asked how many homes TfL could retain for PRS, Craig said: “We are talking about 10,000 units from the first set of sites, I think overall we are going to be developing tens of thousands. It is an open question at this stage as to what extent we retain those through PRS, but I would be surprised if it was not in the thousands.”
alex.peace@esattesgazette.com
