Developer Capco now hopes to build more lower priced homes on site
Brexit and the impact of changes to stamp duty were blamed as a further 6% was wiped off the value of 7,500-home Earls Court scheme in the last six months.
The developer’s chief executive Ian Hawksworth reported that the scheme was now valued at £1.1bn, 20% down on its 2015 valuation of £1.4bn.
As we reported in July, Capco had already confirmed that 14% was wiped off the 2015 valuation of the scheme in the first six months of 2016.
The Financial Times said the drop is one of the largest recorded in the current downturn for high-end property in the UK capital; on average, prices for prime central London development land fell 11.5% in 2016, according to Knight Frank, the property agents.
The land value decline pushed the group, worth £2.5 billion, which also owns a large area of Covent Garden, to a £119m loss for the calendar year, down from profits of £431m a year earlier, it said in final results released on Wednesday.
Capco is now negotiating with the Greater London Authority to make changes to its master plan for Earl’s Court.
These would increase the density of housing, building 10,000 rather than 7,500 homes and adding tenures such as private rented homes and shared ownership.
The previous plan had focused on high-end homes for sale, a market that has slumped over the past 18 months, partly thanks to stamp duty changes and the vote to leave the EU.
This accords with our latest report on the
Fulham Property Market which reveals that sales of luxury flats slowed to a halt in the final quarter of 2016, with no sales at all recorded in Lillie Square, the first part of the Earls Court development.
However, Capco say that construction of the nearly fully sold 237-home phase 1 of Lillie Square is progressing well, while the first release of homes for sale in phase 2 has continued with 59 apartments now reserved or exchanged.
Plans are also progressing for the redevelopment of Empress Place, next door to the former Earls Court Exhibtion Centre, and a planning application is expected to be submitted this spring to create 400 new homes and retail space.
Capco also received detailed planning approval last month for Exhibtion Square which is located at the entrance of the Earls Court estate adjacent to Earls Court Underground station.
February 24, 2017