Transport for London’s new property company could deliver up to 46,350 homes across its land, according to new proposals being drawn up.
A recent TfL report provided to the body’s finance committee outlines various scenarios to raise the current output for subsidiary Transport Trading Limited Properties from 10,000 homes, dubbed Plan X.
The development company TTLP currently expects it will raise development to 13,278 homes, with a £400m capital injection including just under £300m in commercial debt. The so-called Baseline Plan follows consultation with Deloitte and market engagement. It would see TfL develop 50 sites spanning 145 acres, with assets valued at £5.3bn.
However, net funding of £2bn, including grants from the Greater London Authority and the Ministry of Housing, Communities and Local Government, could provide access to a further 61 commercially unviable projects, adding a further 280 acres and a further 33,072 homes.
This would see the portfolio increase to 46,350 homes with an asset value of £9.9bn. In the documents, TfL adds that “options from the Housing Growth Plan can be introduced in the future as deemed appropriate”.
In a process named Project Pattern, CBRE evaluated some 17,000 sites to unlock new land for housing. Agents whitted down 143 opportunities across 212 acres – with 87% of this land to be developed for housing, and the remaining to be split eventually between office and industrial or logistics development.
The business has around 637 acres of developable land, but has narrowed this down, filtering out land that is not appropriate due to planning, operational or commercial reasons.
TTLP aims to approach the debt markets before the end of 2021, with the first drawdown in spring 2022. This timeframe would see some 8,000 homes started by March 2024, and almost 11,000 by March 2025.
To date, TTLP has secured planning consent for 6,300 homes, with a further 1,500 homes in schemes awaiting approval and 1,200 due to be submitted over the next year. The current Baseline projections would see TfL’s portfolio climb from £1.3bn at the end of March 2021, to £4.1bn over the next 15 years.
Graeme Craig, director of commercial development at TfL, said: “TfL’s housing programme has always been ambitious and the pandemic and multiple lengthy lockdowns have had a significant impact on our ability to build more homes, as it has for housebuilders across the country.
“As part of our new funding deal with government, we have been working with the GLA and MHCLG to agree a plan for our housing delivery programme, including a clear milestone for housing, as well as affordable housing, to be delivered by the end of 2024.”
Plans for the housing business were first revealed at the start of June, following the government’s latest £1.08bn bailout. The strategy aims to deliver long-term revenue to plug holes in public funding.
The government has asked TfL to boost revenue with a further £500m to £1bn per year by 2023. This would see government support decline, with TfL becoming financially sustainable from April 2023.
Craig added: “As part of our long-term strategy, and building on the successful work that has already taken place in recent years, we are now looking to take forward development activity in a commercial property company that is wholly-owned by TfL.
“This will provide sustainable revenue to reinvest into public transport while delivering thousands of new homes for the capital, with 50 per cent affordable housing across the current portfolio. This entity would be able to progress our commercial development programme by accessing commercial debt, which would help progress commercially viable projects in the long term.”
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