In a statement issued last week, the Old Oak and Park Royal Development Corporation (OPDC) said it has abandoned its regeneration plans for Old Oak North, which included 5,900 homes and 51,600 square metres of employment space on land owned by second hand car dealership Cargiant.
Plans to secure a £250 million grant from the government’s Housing Infrastructure Fund in relation to the site have also been abandoned, the development corporation said.
In February this year, Cargiant denounced the regeneration project as a "cock-up" and said the development corporation had failed to address a series of challenges including the cost of the company’s relocation and the provision of site infrastructure.
At the time, London mayor Sadiq Khan, who has overall responsibility for the development corporation, said he was "extremely disappointed" that Cargiant was "looking to frustrate a project that will deliver tens of thousands of much-needed new homes and jobs".
The project was dealt a further blow in September when planning inspector Paul Clark issued his interim findings on the development corporation’s emerging local plan and advised that sites owned by Cargiant were undeliverable and should be deleted from the document.
OPDC has now confirmed it no longer intends to acquire land owned by Cargiant and said it will be amending its local plan in line with the inspector’s recommendations.
"The shift in approach has been triggered by recent, rapid increases in industrial land values in west London which mean that it is currently not financially viable to deliver OPDC’s early regeneration plans at Old Oak North," it said.
OPDC said it would continue working to develop sites in both public and private ownership and would focus its efforts on large public sector land holdings close to Willesden Junction and a proposed new High Speed Two (HS2) interchange in the area.
David Lunts, interim chief executive at OPDC, said: "This new approach to delivering the amazing potential at Old Oak and Park Royal makes good sense given the dramatic changes in market conditions over the last year or so.
"With the price of industrial land shooting up four or five-fold in as many years, earlier plans to bring forward Old Oak North are unfortunately not currently viable.
"But this in no way undermines our ambition for thousands of new homes and jobs as these can be achieved on many nearby public sector sites."