UK billionaire's US$648m London development gets rejected

[LONDON]  Billionaire Hugh Grosvenor's property company was denied permission to build a US$648 million neighborhood in London's trendy Bermondsey district, as local officials said the plan offered too little for low-income families.

The rejection of Grosvenor Group Ltd.'s proposal to put up more than 1,300 rental apartments near Tower Bridge highlights growing tension between developers and lawmakers over the chronic shortage of affordable housing in the capital, as average Londoners struggle to buy homes despite a slowdown in the property market. Wednesday's decision by Southwark Council was expected after planning officials recommended refusing the plan.

The property group is owned by the Duke of Westminster's family trusts, and its estate includes hundreds of acres in London's tony Belgravia and Mayfair neighborhoods. Hugh Grosvenor, 28, the current duke, assumed the title in 2016 and has a net worth of US$12.4 billion, according to the Bloomberg Billionaires Index.

Grosvenor had pitched the project as a solution for the "increasingly overlooked majority of Londoners" who don't have the means to buy a home, but earn too much to qualify for social housing. The firm promised discounted rents on about 27 per cent of the units, saying it would take 20 years to break even on the investment.

The developer had hoped to convince the council of the "wider benefits" even after the planning commission's recommendation, Simon Harding-Roots, executive director for major projects at the Grosvenor Britain & Ireland property developer, said after the vote. The firm is "very disappointed" with the final outcome, he said.

Those promised benefits weren't enough to convince local planning officials, who said that the plan failed to provide the "maximum reasonable amount" of housing at a cost people in the greatest need could afford.

Southwark Council has been consistent in pushing for more affordable homes. Last year, it approved a Qatari-backed venture to knock down a shopping center and build almost 1,000 homes in the Elephant and Castle district only after extracting a commitment to increase the number of affordable units.

BLOOMBERG