Capital & Counties Properties PLC (“Capco”) and Transport for London (TfL) have agreed to pursue proposals to settle heads of terms for a joint venture to enable the development of Earls Court 1 & 2 in line with the Earls Court Masterplan. This approach was endorsed by TfL’s Finance & Policy Committee which met on 18 July.
TfL owns the freehold to the exhibition centres known as Earls Court 1 & 2, and Capco is the current leaseholder of both sites. The agreement will enable the two organisations to establish a joint entity which will own a new 999 year lease over the sites, as well as other land owned by Capco. It is envisaged that ownership of the development will be split 63 percent to Capco and 37 percent to TfL, which reflects the value created by combining both organisations respective freehold and leasehold interests. No cash consideration will be payable by either party.
Under the joint venture, Capco will be the exclusive development manager. This will enable a comprehensive approach to be taken for the implementation of Sir Terry Farrell’s Masterplan for the wider Earls Court and West Kensington Opportunity Area which was approved by the Mayor of London on 4 July 2013. Funding for each phase of the development will be sought when it is in a position to be progressed.
Gary Yardley, Investment Director of Capco, commented: “This is a major step forward for the Earls Court Masterplan. On top of the resolution to grant planning consents, and the agreement we already have in place with LBHF, these proposals would mean that the development of Earls Court can now be progressed. We look forward to working with TfL to deliver the substantial benefits to London and the local community, creating much needed new homes and new jobs.
The Earls Court Masterplan area represents a unique opportunity to regenerate a substantial part of central London, creating 7,500 homes, 12,000 jobs and new health, education, cultural and community facilities as well as 23 acres of green space including the five acre Lost River Park. It received resolutions to grant planning consent from the London Borough of Hammersmith & Fulham and the Royal Borough of Kensington & Chelsea in 2012.
Graeme Craig, Director of Commercial Development at TfL, said: “We are pleased to be making progress on a deal for the development of Earls Court 1 & 2 with Capco which will see the creation of much needed jobs and homes for London. The revenue generated from the deal will be reinvested back into London’s transport network to deliver increased and improved services for our customers. It reflects a new approach we are taking with our extensive property portfolio to work with leading developers whilst retaining our interest in our properties. This will ensure that we deliver real long-term value for our fare and taxpayers.”
The agreement announced on 18 July 2013 remains subject to approval by the Boards of Capco and TfL respectively, which is expected to be sought at a later date upon finalisation of the deal.