Earls Court’s affordable rethink

[caption id="attachment_870696" align="aligncenter" width="570"] The West Brompton segment of CapCo’s Earls Court scheme[/caption] Capital & Counties’ expansion of its Earls Court scheme by 2,500 homes is likely to include a large proportion of additional affordable housing to satisfy the mayor’s desire to see the current proportion increased. The scheme is due to increase by a third to 10,000 homes and a new masterplan could be submitted by the end of the year. Affordable residences now account for 1,600 of the 7,500 flats, or 21.3%. For areas with detailed consent, CapCo is under no obligation to change anything. This applies to zone 2 [see map], despite CapCo being in a joint venture with Transport for London. London mayor Sadiq Khan’s affordable housing target for new schemes is 35%, and 50% on TfL land. The proposed extra 2,500 units could go anywhere and offer various tenures, and may include some build to rent. There could also be more office and commercial space included in the fresh masterplan. The future of the scheme and its success is crucial to CapCo. Earls Court makes up one of two main parts of the business, the other being its Covent Garden estate. The company has seen its share price tumble by more than 30% since the start of last year, attracting the interest of, but no action from, private equity firms. In July last year, CapCo wrote the Earls Court project’s value down by 14.5% to £1.2bn. The current outline masterplan was submitted in November 2013. Since then there have been objections from residents and concerns over sales rates in the context of a cooling central London residential sales market. Before Christmas, CapCo chief investment officer Gary Yardley said: “Progress continues and we look forward to working with our partners to grow and evolve the masterplan in line with London’s needs.” Progress has been slow. There is no schedule to start construction outside Lillie Square – the only area where sales have begun and scheduled to be complete in 2020. At the current sales rate of less than one per week, it would take more than 140 years to sell all the homes. Sales rates Sales have begun so far only at Lillie Square. Some 80% of phase one was sold within five weeks of launch in April 2014, but from then sales rates for later phases have slowed dramatically. Phase one sold for an average of £1,500 per sq ft; phase two is selling for £1,560, 4% more. Phase two is 70% sold. • To send feedback, e-mail alex.peace@estatesgazette.com or tweet @EGAlexPeace or @estatesgazette