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Old Oak CEO Victoria Hills: 'We'll call the shots' on 650 ha west London regeneration

A Crossrail-HS2 super hub, 25,500 homes and two warring landowners: Victoria Hills reveals how she’s managing the hugely complicated process of turning Old Oak into the capital’s newest neighbourhood.

It’s the largest regeneration project in the UK and it’s moving forward at pace. With the prospect of 25,500 homes, 65,000 jobs and a transport super hub to rival King’s Cross, Old Oak and Park Royal will transform west London.

Victoria Hills, the woman in charge of bringing the 650 ha project to life, is under no illusions as to the scale of the job. “This is a big deal,” she says.

“There are some big government decisions that we need to influence now to avoid unintended consequences in the future”

The site straddles three boroughs and has a complex mix of public and private landownership, which has already sparked a major row between Queens Park Rangers FC and the world’s largest used car dealership, Cargiant.

It was against this challenging backdrop that London mayor Boris Johnson set up the Old Oak and Park Royal Development Corporation (OPDC) in March last year to manage the planning and development process. Ms Hills, who has more than 15 years’ experience in the public sector, was named chief executive.

Since then, planning has continued apace. The team got its Opportunity Area Planning Framework in place last November, with a Local Plan following shortly after.

“If you were to do a stock take of other planning authorities across London, I can guarantee that no one has moved that quickly to go from an OAPF to a Local Plan,” Ms Hills says with pride.

Why is this so important? Because, as Ms Hills points out, “the faster you go, the quicker you can de-risk the land and provide certainty to the market that this is all happening”.

Millions to billions

These achievements are just the beginning, however.

Once complete, Old Oak will be home to an impressive new transport hub, connecting Crossrail, High Speed 2 and National Rail. But there’s one problem: “It’s not designed how we or the mayor want it,” Ms Hills says.

“It looks like the Stratford International station, which has no development deck and that’s the point: we want a development deck.”

By investing a few hundred million in a development deck now, which would allow for commercial developments to be built above and around the station, the potential long-term upside could reach billions of pounds, Ms Hills explains.

Victoria Hills chief executive Old Oak and Park Royal Development Corporation 2

Victoria Hills chief executive Old Oak and Park Royal Development Corporation 2

The OPDC is trying to secure an agreement with the government that a development deck will be built into the HS2 station design. “There are some big government decisions that we need to influence now to avoid unintended consequences in the future,” she asserts.

“We’re in active discussion with government at the moment about how we would have, in principle, a decision to put that aspect into a design tender. If we don’t do that this year, a big contract will go out to design a station and it won’t be designed in a way that has the maximum development potential.”

But getting the deck would be only the start. Ms Hills also wants to be able to retain business rates and is putting pressure on government that the OPDC be allowed to do so.

The corporation is looking to emulate the deal struck by Birmingham City Council around its HS2 station, through which the local authority has been allowed to capture business rates over a 25-year period to pay for infrastructure works.

“The denser commercial development we have, the more business rates we can have to help pay for some of this infrastructure, which is going to be very costly.”

International investment

As for who will pay for the development deck, there are a few scenarios on the table.

One option could see the OPDC form a joint venture with an investor that would pay for the enabling works expected to cost hundreds of millions. The investor would then take a percentage share of the uplift – “50 per cent, let’s say” – of those development rights over a 20-year period.

Ms Hills says potential investors could include Hong Kong-based railway company MTR International or property developer Related. Both are experienced in developing around stations, with Related currently building one of the biggest decks in the world in New York.

“I might be so bold to say that the exact mix [of housing] is one for the next mayor because they are going to have some very strong views and housing is a top priority for both of them”

The US developer recently entered the UK market in partnership with Argent at Brent Cross Cricklewood in north London.

Station design isn’t the only conversation the OPDC is having with government at the moment.

Around 70 per cent of all the jobs and homes in the Old Oak area are on government land – about 12,000 homes and 46,000 jobs.

“It is really important for the corporation to have some control of how that land can be brought forward to deliver,” Ms Hills says.

That power would ensure the OPDC can deliver the tenure mix Ms Hills believes is right for the area, which could include a sizeable proportion of affordable housing.

Victoria Hills chief executive Old Oak and Park Royal Development Corporation 1

Victoria Hills chief executive Old Oak and Park Royal Development Corporation 1

She is wary of developers bringing the “dark arts” of viability assessments to the housing mix, especially given their poor history of affordable homes delivery in the capital in recent years.

“Commercial viability is one of those dark arts where developers are very clever at demonstrating that by the time they pay for their infrastructure costs and land assembly and planning, there isn’t that much left for affordable housing, which is why the levels have been so low in London.

“But if you look at the transformation of the Olympic Park [also delivered through a mayoral development corporation], about 30 per cent was affordable and that’s because they had control of the land.”

Political influence

She is still uncertain of the right mix of housing tenure for Old Oak, with May’s mayoral election race likely to play a part.

“I might be so bold to say that the exact mix is one for the next mayor because they are going to have some very strong views and housing is a top priority for [Zac Goldsmith and Sadiq Khan].”

Both candidates have pledged to deliver more affordable homes in the capital, which will be a difficult promise to keep. Starter Homes, for example, which offer a 20 per cent discount for first-time buyers under the age of 40, will still be unaffordable in over 58 per cent of local authorities for families earning average wages, according to research by Shelter.

“We don’t want it to end up being soulless homes and nothing else. We want it to have an identity, which we can determine”

Labour’s mayoral candidate Sadiq Khan is heavily opposed to the policy, while Tory rival Zac Goldsmith has backed it, so whoever London elects will play a significant part in shaping Old Oak.

“There are lots of people out there with ideas of what Old Oak should be but we haven’t come up with our own position yet; [however], the new mayor will have a strong view on that,” Ms Hills says.

“Either way, we don’t want it to end up being soulless homes and nothing else. We want it to have an identity, which we can determine.”

Home sweet home

It’s clear that Ms Hills is serious about making Old Oak a place where people both want to live and can afford.

“We’ll call the shots as to what sort of place it becomes,” she adds. It’s a mantra she wants to be heard loud and clear as overseas investors fly to London to meet the team.

The high level of interest from backers only helps with the discussions she is having with government, Ms Hills insists.

“I can say with certainty that we have national and international interest. When we have our masterplan and a clear commercial strategy as to who we want to bring those sites to market, we’ll be ready to engage with those people who are really interested.”

As the mayoral election edges closer, Ms Hills wants as many “big decisions” as possible made before campaigning gets under way in earnest in the spring.

The clock is ticking, but Ms Hills and her team are already proving they can handle the pressure.

CN Developer Forum

Victoria Hills is among the expert speakers (see below) lined up for the Construction News Developer Forum on 9 June.

The programme will include regional project presentations and Q&A sessions with high-profile developers around procurement and work pipelines.

This year’s Forum takes place at the Bloomsbury Hotel in London on 9 June.

Click here for full details of this year’s CN Developer Forum.

  • Roger Madelin, head of Canada Water Development, British Land
  • Bill Hughes, managing director, property, Legal & General
  • Graeme Craig, commercial development director, Transport for London
  • Scott Hammond, managing director, Essential Living
  • Andrew Locke, development director, Native Land
  • David Pringle, director, NOMA, Co-operative Group
  • Phil Wade, director, First Base

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