Decision details

To seek approval for the Council

a.    to enter into a Deed of Variation to amend the Development Agreement dated 31 March 2023, specifically to vary the land payment milestone for Core A & Core B and amend the completion arrangements for the associated affordable housing units.  The private units within Cores A and B are being sold by Countryside Properties (UK) Limited (“Countryside”) to Principal Asset Management, a Private Rented Sector (PRS) operator.

b.    To amend the Headlease to be annexed to the Deed of Variation.

c.     To grant the Building Licence on Core A, Core B and the Western Courtyard to Countryside.

d.    Licence to underlet to allow Countryside to grant an underlease of Core A and Core B to Principal Asset Management

e.    Estate Management Deed between (1) The Council (2) Countryside (3) NWCC Residents Management Company Limited and (4) North West Quartet Estate Management Company Limited(“EMD”).

That the Corporate Director Neighbourhoods and Regeneration:

i)               Approves entering into the Deed of Variation to vary the Development Agreement dated 31 March 2023, to vary the form of the Headlease of Cores A and B and the Western Courtyard, to grant the Licence to underlet in respect of Core A and separately in respect of Core B, to grant the Building Licence of Care A, Core B, and the Western Courtyard and the North West Quartet Estate Management Company Limited (“EMD”).

ii)              To note the benefits of the sale, including accelerated construction programme, early receipt of land payments, and reduced financing costs to the Council. Other benefits include de-risking the continued delivery of the project and supporting the strategic objective of a mixed-tenure community.

Neville House, Winterleys, Carlton House and Carlton Hall (NWCC) is a mixed tenure housing development within the South Kilburn Regeneration Scheme, progressing in line with the programme to deliver 225 homes, of which 95 will be affordable. Cores E, F and G (NWCC East) are scheduled for delivery in June 2026, providing a total of 72 units (32 units in Core E, 19 in Core F, and 21 in Core G). A further 23 units will be delivered in January 2027 within Core D, located in NWCC West. In addition, the private sale element of the scheme comprises 130 units, delivered across Core A (38 units), Core B (57 units), and Core C (35 units).

Countryside, the Developer, has advised that the London sales market continues to be challenging, with sales rates across the capital lower than anticipated for all developers, and has been exploring the potential of a bulk sale to a Private Rented Sector (PRS) operator to help mitigate sales rates and maintain construction pace. They have introduced Principal Asset Management as a PRS operator interested in purchasing 95 private market units in NWCC West Cores A & B by way of an Underlease of Core A and Separate Underlease of Core B. In order to proceed with the proposal, Brent Council is requested to grant a combined headlease for NWCC Cores A and B. the NWCC Development Agreement includes a provision for early drawdown of a headlease if a Private Rented Sector (PRS) sale is agreed.

Countryside have stated that proceeding with the PRS sales will accelerate the NWCC West development by approximately 24 months, preventing the project form being held back by the slower rate of individual private sales. Brent Council would benefit as the affordable core in NWCC West could be completed much sooner than the original forecast completion date, potentially as early as January 2027.

The PRS sale is a positive development for local South Kilburn partners and neighbours as it fast-tracks construction timescales which is a positive for the long-term vision of South Kilburn and minimises the period of a live construction site.

The NWCC Development Agreement mandates a payment of 50% of the land payment when a headlease is drawn down for a PRS sale, and without a PRS sale the land payment for Cores A&B is not due until Cores A & B practical completion. Therefore, a PRS sale of Cores A&B means that half the land payment is payable when the lease of Cores A&B is completed and the other half payable on the fixed date of 1 May 2027.

Countryside now propose splitting land payments into three payments:

1.    Core A&B - £2,151,358.50 payable on the completion of the headlease of Cores A&B.

2.    £2,151,358.50 payable on a fixed payment date of 1 May 2027.

3.    This generates a total land payment (excluding Core C) of £4,302,717 (plus £150,000 deposit already paid) in line with the agreed land payment of the original development agreement.

The proposed payment times are a betterment to the original agreement which assumed the land payment would be made upon completion of the entire development, which at the time was targeted to be 20 May 2030.

ountryside has stated that proceeding with the Private Rented Sector (PRS) sales will accelerate the NWCC West development by approximately 24 months. This approach prevents the project from being held back by the slower rate of individual private sales. Brent Council would also benefit, as the affordable core in NWCC West (Core D, comprising 23 social rented units) could be completed much sooner than the original forecast completion date, potentially as early as January 2027, rather than October 2027.