As value of giant Earls Court development plummets to under one billion pounds
Earls Court developer Capco has confirmed that it is in talks to sell the 31 storey Empress State building on Lillie Road to the Mayor of London’s office for £240 million.
It is currently occupied by the Mayor’s Office for Policing and Crime (MOPAC), but its lease is due to end in 2019.
After buying the building in 2013, Capco gained planning permission to convert it to residential use as 340 flats a year later.
Now though, a statement from the developer says: "Capco notes recent press speculation and confirms that it is in discussions with The Mayor’s Office for Policing and Crime in relation to its occupational requirements at the Empress State Building.
" Options under consideration include a lease extension and the acquisition by MOPAC of the freehold interest in the building. At this stage there is no certainty that any transaction will be agreed. Further announcements will be made in due course as appropriate."
This latest news comes as it is revealed the overall value of the vast Earl’s Court scheme dropped from £1.14bn to £989m in 2017 due to "economic and political uncertainty".
Since 2015, the value has plummeted by over £400 million and Capco chairman Ian Durant said this week: " Economic and political uncertainty has impacted the residential market in London, resulting in a further decline in the valuation of our investments at Earl’s Court."
This means the future of the entire Earls Court project is now far from certain. Sales at its first phase, Lillie Square in Seagrave Road remain slow and on Lillie Bridge, a number of shops and restaurants which were due for demolition along with adjoining Empress Place have instead been reopened as part of a large temporary venue called The Prince.
Last month, H&F Council called Capco's plans for another key part of the Earls Court development, West Kensington and Gibbs Green Estates 'undeliverable' and demanded that instead of their redeveopment, the estates be returned to council control.
Residents of the estates have been campaigning against demolition of their homes to make way for luxury flats since plans were revealed almost ten years ago.
At the time of the council's announcement, Jonathan Rosenberg, community organiser for West Kensington and Gibbs Green estates, said: "Residents are fed up with being kicked around in this high-stakes game of property speculation.
"Capco wants to exit the scheme, but there’s no way anyone will buy it so long as our estates and campaign are part of the package.
"The best way for them to de-risk the redevelopment is to hand back the estates."
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February 23, 2018