Purpose

To seek approval for Brent Council to enter
into a Deed of Variation to an Agreement for Lease and Development
in relation to Peel South Kilburn, dated 31 July 2018 and Deed of
Variation to a Lease relating to Phase 4, Peel South Kilburn dated
29 June 2023 to allow the developer to sell 48 Private units in
Core D1 Peel Phase 4 to a Private Rented Sector (PRS) operator.

Content

That the Corporate Director Neighbourhoods and
Regeneration, in consultation with the Cabinet Member for
Regeneration, Planning and Property:
 
i)              
Approves entering into a Deed of Variation to the Agreement for
Lease and Development in relation to Peel South Kilburn dated 31
July 2018 and a Deed of Variation to Lease Phase 4 South Kilburn
dated 29 June 2023 to facilitate sale of private units to a PRS
operator.
 
ii)             
To note the benefits of the sale including accelerated construction
programme and early payment of land receipt to the Council. Other
benefits include de-risking the continued delivery of the project
and delivering the strategic objective of a mixed tenure
community.

Reasons for the decision

The variations are required to allow the
developer to grant an underlease of 48 private units to a PRS
operator. The PRS sale is a positive development for local South
Kilburn partners and neighbours. It is set to fast-track
construction time scales by 10 months, accelerating the delivery
from November 2026 to January 2026. The period of live construction
will be shortened for those living and working nearby, minimising
noise, dust and general inconvenience. The development’s C3
planning classification fully supports PRS use, eliminating any
potential planning issues. All sales overage obligations under the
Peel Development Agreement have been fully settled, removing any
future implications.
 
The accelerated construction time-scale will
also accelerate the Land Payment due to the Council on achieving
Practical Completion Peel Phase 4.

Alternative options considered

The developer has advised that the London
sales market continues to be challenging with sales rates lower
than anticipated for all developers, so the potential of a bulk
sale to a PRS operator to help mitigate sales rates and maintain
their construction pace was seen as a beneficial option. The
remaining 38 unsold units within Peel Phase 4 Core D1 would remain
as Private Market Units for open market sales. To make management
practical and appealing, there is a need to grant an underlease
comprising the 48 private units to the PRS operator.