graeme Craig looks at plans for one of London’s biggest new housing developments. The models show a mix of low-rise and high-rise buildings, 4,500 houses, as well as cultural venues and parks, which will emerge from the rubble of the now demolished Earls Court Exhibition Centre.
Craig runs the property arm of Transport for London – he was appointed its first commercial director over a decade ago. TfL’s day-to-day job is to run the capital’s bus and metro network, but it has retained its land and 22 years after its founding it remains the capital’s third-largest landowner, after the Emirate of Qatar. and the Mayor of London. He could soon be one of its biggest property developers.
Over the next decade, Craig laid out plans to build over 20,000 homes, with 1,650 already under construction.
“We hope to build homes for decades to come,” he says. “I would be surprised and disappointed if we weren’t the most impactful developer [in the capital].”
The largest development is Earl’s Court, where construction is expected to start in 2025 and take 15 years to complete, with plans to create up to 15,000 jobs. The vision of the Earls Court Development Company, created by TfL and Delancey, is to “bring back the wonder” to a once iconic music and events venue. But it’s a vision that’s been delayed and revised, and details are scarce at this point. Developers have returned to the drawing board after protests over plans to demolish two council estates, which have since been returned to Hammersmith and Fulham council. The new master plan is expected to be submitted by October 2023.
TfL’s property arm owns 2,226 hectares (5,500 acres) of land across London, or 1.5% of London’s land area. The portfolio is valued at £1.7 billion, consisting of land around stations and 800 railway arches.
Rather than sell off its lucrative assets, TfL set up a separate property department in 2012 to develop the land and manage the properties. Almost two-fifths of the current portfolio is commercial space, but TfL wants to become a bigger player in offices and housing.
“Hybrid work is here to stay. Companies that have offices in central London are going to work harder,” says Craig.
“People will not come just to send emails. You want it to be a place where people want to come and work,” he says. “We’re not thinking about rows of desks where people are looking at screens – people can do that at home; offices are there for the things you can’t do at home.
Young people will need to be brought back to the office, he says, and offices will need to have pleasant, open and flexible meeting spaces and other attractions – although TfL does not feature swimming pools and basketball courts, like the new Google’s head office in La Croix du Roi. “It’s possible to have fun at work without playing basketball,” says Craig.
The real estate arm is 100% owned by TfL, which collects all of its profits, but is otherwise managed separately. Other projects include three large office developments which have planning permission at Paddington, Southwark and Cannon Street stations, and it is building a series of apartment buildings across London in partnership with the construction specialist for Grainger rental and others. He recently secured £200million from three banks, which will provide him with sufficient funding for the next three years.
TfL has not retained all of its sites. He was criticized for selling ‘family money’ – his former Grade I listed headquarters at 55 Broadway overlooking St James’s Park – to a hotel entrepreneur for £120million in 2019. He also sold land above Crossrail stations, which generated £300m. so far and is expected to gross £500m in total. But Craig insists TfL will only sell assets that don’t match the portfolio.
Half of the planned 20,000 homes will be rated as affordable – a higher proportion than many other developers. A large part – about a third of the housing – will be for rent.
With other partners, TfL is also building 479 rental homes and retail space above and around the new Northern line station at Nine Elms, south of the river, as well as 619 homes across eight buildings at Kidbrooke in Greenwich. , 50% of which will be affordable – a mix of London condominium and rent.
Unlike Network Rail, which sold thousands of railway arches for £1.5billion to private equity group Blackstone in 2018 – a controversial deal that has driven up rents for many small businesses and in forced some to leave – TfL retained its 800 railway arches.
“In arches, we see more and more of a focus on things that are experiences – whether it’s great food or other experiences, something different from sitting at home on the internet” , explains Craig. “There will be more fluidity between work, home and leisure.
“We are primarily small business owners,” adds Craig. The vast majority of TfL’s 1,500 tenants (93%) are small and medium-sized businesses and other businesses located in tube stations and arches.
Carmen O’Neal, the 36-year-old founder of Hackney 58 and Co gin distillery in east London, the first female-run distillery in the UK, which opened in July 2019, says: ” I built a distillery on my carpet[ernity] Leave. I found the bow when I was pregnant and wanted it so badly.
TfL provided support during the pandemic and charged the business no rent when it had to close under lockdown rules and lose 95% of its business. During this period, it stopped making gin and switched to producing hand sanitizer for the NHS and Met Police.
The solar-powered distillery reopened last July and holds gin-making classes at the front of the arch, while it produces, bottles and labels gin at the back. O’Neal, from Canada, says that unlike other owners she had in the past who were “unreachable, I never felt that with TfL”.
The car workshop
Jack’s Garage in Ladbroke Grove in west London, owned and run by Joseph Salama, occupies three railway arches owned by TfL. The company, founded in 1995, is a specialist VW workshop and has been involved in converting cars into battery electric vehicles, which cost from £30,000 to over £100,000 depending on vehicle generation and fitted equipment .
Salama says TfL came to the company’s rescue after the nearby Grenfell Tower fire in 2017, when roads were closed for several weeks and it was unable to receive auto parts deliveries . TfL gave the garage a six-month grace period and also donated two arches for an extended period to a local charity helping survivors.
During the Covid pandemic, TfL has given all tenants in the area a three-month rent-free period and an additional three months at half the usual rent. “They really helped the local community,” he says.