TfL’s commercial arm eases pain of £1bn deficit (FT)
Profits from build-to-rent schemes help offset shortfalls in transport revenues
The head of Transport for London’s commercial arm has said he expects the division to generate more than £300m this year for the transport body, whose most recent annual accounts showed a £1bn operating deficit.
Graeme Craig said the commercial arm had provided a net surplus of £200m to TfL last year — mostly from advertising and rental income — and was hoping to increase that by at least 50 per cent in the current financial year.
He said that TfL would continue to raise revenues in the long term by participating in more build-to-rent schemes, where the transport body works with property developers to build on TfL land and collect rental income. TfL brought nearly 5,000 homes to market in the past two years and expects to deliver at least 3,000 this year, he added. “We don’t want to be building dormitories next to our stations for people to catch an early train. These sites are . . . the heart of London’s town centres.”
He pointed to a potential scheme at Morden, a station at the southern end of the Northern line, where the local council and TfL had pooled their land interests “to create a new town centre”. The project could generate more than 2,000 homes, although not all will necessarily be build-to-rent.
TfL has set a target to raise revenues of “over £500m” from property transactions “to support transport investments over the next five years”.
Mr Craig was speaking alongside the head of TfL’s new consulting arm, Helen Murphy, who took up the role in June. Ms Murphy said that the transport body had been in touch with 20 “major global cities” about selling its engineering and managerial services in the next decade, and was considering offers such as “running metro systems overseas”.