The Mayor of London, Boris Johnson, has selected preferred bidders for two sites, owned by the Greater London Authority (GLA), to fast track the creation of more than 1,200 new high quality homes including 480 homes for long-term private rent. The developments will use an innovative covenant to help relieve pressure on the capital’s housing market, accelerate development and raise standards of private renting.
Over the last decade the number of households privately renting has increased to around two million Londoners – about one in four – but the capital has few purpose-built rented schemes compared to the US or Europe. The GLA marketed two sites, Silvertown Way and Pontoon Dock, with the specific aim to deliver a significant proportion of private-rented homes. The requirement for top quality private rent, built alongside traditional private sale and affordable housing, will help to speed up the construction period, encourage long-term institutional investment into the residential market and improve the design, tenancy arrangements and management of the homes. The GLA requires both developers to hold the private-rent housing for at least ten years.
OPAL LAND LLP, a joint venture between Thames Valley Housing and Galliford Try PLC’s residential arm, Linden Homes, has been selected as the preferred delivery partner for Silvertown Way in Canning Town, Newham. The 2.1 hectare site was previously vacant land, and will become more than 1,000 homes including 347 private rented, 232 for affordable rent, and 154 for affordable home ownership. It will also include 86,000 sq ft of employment and non-residential space.
A consortium backed by the London Pensions Fund Authority alongside Bouygues Development and Grainger plc has been selected as the delivery partner for Pontoon Dock, a 0.69 hectare site within Royal Docks, also in the London Borough of Newham. The site is currently a public car park and coach stand that will be transformed into more than 200 homes and approximately 11,000 sq ft of non-residential floor space, to include 137 private rented sector homes, 42 for affordable rent and 31 for shared ownership. The project, which will see the car parking re-provided, will also improve access to the popular Thames Barrier Park.
The Mayor of London, Boris Johnson, said:
“Boosting house building is my number one priority, with City Hall leading the way with a range of creative approaches to address a 30 year failure to build enough homes. These two great new developments will turn surplus public land into new homes for Londoners. These schemes will be built faster than conventional methods by providing a US-style private rented model alongside traditional tenures. It’s important for London’s economy to support the growing rental market, providing top quality homes and management, together with the reassurance of longer tenancy agreements. I also want to entice more institutional investors to come forward and invest in quality homes for Londoners, further supporting house building and creating thousands of new jobs”
Susan Martin, CEO of the London Pensions Fund Authority said:
“We are delighted to have been selected as the majority financial backer for this project. It will provide essential housing for London as well as providing attractive liability matching, long term returns for our pensioners.”
Nick Jopling, Executive Property Director at Grainger plc, the UK’s largest listed residential landlord and manager, said:
“We are delighted to have the opportunity to work with the GLA and once again work with Bouygues on this exciting build to rent project.”
Nicolas Guerin, Managing Director of Bouygues Development, said:
“With an established relationship with the GLA and having worked on regeneration projects across the capital, we are very pleased to be selected as preferred bidders for this site. We are amongst the UK’s most experienced developers in the private rented sector and we look forward to working alongside out valued partners, London Pension Fund Authority and Grainger plc, to create another exciting new place to live for the local community in Newham.”
Geeta Nanda, CEO of Thames Valley Housing said:
“This is the fourth development opportunity that we have secured through our joint venture with Galliford Try. Large regeneration schemes, like this one in Silvertown present us with a chance to deliver a complete mix of housing, especially private rented units. As initial investors in Fizzy Living, we are delighted that they will be partnering with us to bring forward these valuable PRS units, which the capital so desperately needs”.
Galliford Try chief executive Greg Fitzgerald said:
“We are delighted to have been selected for both these schemes which underline our strong relationship with the GLA and HCA. These schemes are testament to the combined resources of the group and our proven expertise in regeneration and affordable housing projects.It underlines our continued investment in delivering much-needed homes and working in long-term partnerships with our partners in the sector.”
The Mayor fast tracked development partners through the Mayor’s London Development Panel, a framework panel of 25 developers, which allows public land owners to avoid lengthy procurement processes and award individual contracts more quickly, and encouraging members to team up with institutional investors to bid. These sites are among the 670 hectares the GLA took on in 201, with over 85 per cent already in the pipeline to be developed. More sites, including Stephenson Street in Newham, will follow later in the year and these schemes follow recent deals on other GLA owned sites at Cane Hill in Croydon, St Clements Hospital in Tower Hamlets, and Catford Stadium in Lewisham.
The Mayor’s commitment to fast tracking development and growing the purpose built private rented sector is part of a package of wider measures he is promoting to stimulate house building. He is on track to see 100,000 low cost homes built over his two terms, with more affordable homes being built this year than since 1980, as well as helping 50,000 Londoners into low cost home ownership through his FIRST STEPS scheme, and introducing a range of innovative new measures including new Housing Zones and a new London Housing Bank.