Commenting on the Autumn Statement, Guy Grantham, Director of Research and Forecasting at Colliers International said:
“Just as transport improvements are key to the wider development cycle, so the proposed Northern Line Extension will be important to the wider development of Battersea (VNEB – Vauxhall / Nine Elms / Battersea). The Government’s commitment to fund this extension is therefore great news for those who support the project, however timing and correct phasing are fundamental in maximising the potential.
“Despite the confirmation of Government support, the Northern Line Extension is only likely to break ground in 2015 after planning approvals and consents. Completion is scheduled for 2019 and will therefore not be ready in time for the completion of the new US Embassy.
“The greatest single risk lies in the timing and deliverability of the commercial elements of the Battersea Power Station Scheme. The Chancellor said that borrowing will be supported ‘... subject to due diligence and the agreement of a binding funding and development agreement with developers’.
“However, the largest single generator of project revenue occurs only in Phase 2 of the scheme, comprising around 1 million sq.ft of offices. Project developers and bankers are likely to require that 50% of the offices be pre-let prior to development. It remains to be seen whether an agreement can be reached based on the Chancellor’s conditions that will allow speculative development of the site.”