Sheraton Park Tower's 8 new flats pay £16.5m, capped at an index-linked £20m, not affordable homes. Councillors met 20 Oct; deal to be signed by 30 Nov.
The developer of eight new flats on top of Sheraton Park Tower in Knightsbridge would pay £16.5 million towards affordable housing elsewhere, rather than build any in the building. That payment could rise to a maximum of £20 million, a cap that will rise with inflation.
Kensington and Chelsea’s own policy figure for a payment of this kind was £38.5 million.
The council’s Planning Applications Committee will be asked on Tuesday 20 October to confirm the deal. Councillors first resolved to grant the scheme, reference PP/24/02877, on 3 April 2025. Eighteen months on, the legal agreement that has to be signed before permission is issued still has not been completed.
Updated 22 October: a late addendum to the committee moved the signing deadline from 2 November to 30 November 2026. It also told councillors the £20 million cap is index linked, and that this will be written into the agreement. The council has not yet published the committee’s decision or minutes; we will add them when it does.
What the scheme is
The officers’ report describes a rebuild of the top and bottom of the round tower at the northern end of Lowndes Square. The plans include:
- demolishing the 16th and 17th floors and rebuilding them as hotel rooms
- four new storeys, the 18th to 21st floors, holding eight private flats
- one flat on the 21st floor, two each on the 19th and 20th, three on the 18th
- a rebuilt and extended podium at ground and first floor, with 756 sq m for a restaurant and 1,079 sq m of new shop or commercial space
- a roof terrace and hotel bar on top of the podium
- a basement extension for an electricity substation
The hotel would shrink from 271 rooms to 240, with more suites. Accessible rooms would rise from 3 to 12. The report puts the flats at 4,018 sq m in total, an average of about 500 sq m each.
The extra height would be 14.98 metres. A 2020 permission for the same building, PP/19/05840, allowed 4.67 metres.
Why there are no affordable homes in the tower
The council’s Local Plan asks for at least 35% of floorspace in a scheme of this size to be affordable housing, built on site. A payment instead is meant to be “a last resort”.
The applicant argued that affordable flats could not work in the building. Its reasons included the round floor plan, the single shared core with the hotel, and service charges that a housing association could not afford. Officers accepted that on-site homes “would be challenging to deliver given the arrangement of the building”.
The applicant’s viability assessment then offered £16.5 million. That figure rose after a review by the council’s consultant, Newmark, cut the estimated build costs by £8.4 million. Newmark concluded the offer was the “maximum reasonable amount” the scheme could support.
The 2025 report said plainly that this was short of policy. It put the policy-compliant payment at £38.5 million and recommended a review mechanism, so the council could claim more if the scheme proved more profitable.
What has changed since April 2025
The new addendum report explains the delay. The two sides spent the time negotiating how that review mechanism would work.
The result departs from the Mayor of London’s standard approach. Newmark worked out that the cost of providing 35% affordable housing elsewhere would be about £20 million. So any future rise in the scheme’s value can lift the payment above £16.5 million, but never above £20 million.
Officers say the departure is “justified by the exceptional circumstances and unique characteristics of the development”: flats above a working hotel, in an oddly shaped existing building.
Councillors are also asked to agree three updated payments:
| Payment | Amount |
|---|---|
| Public art, in place of art on site | £100,000 |
| Carbon offset | £182,643 |
| Monitoring fee | £8,558.95 |
The report says public art on the site itself “is not feasible”.
If the committee agrees, the legal agreement must be signed by 30 November 2026. The original report said 2 November; the addendum moved it. If it is not, the Director of Planning and Place may refuse permission.
Who objected
When the scheme went to committee in 2025, the report recorded 11 letters of support and 4 objections from neighbours. Supporters called the current podium an “ugly building base” and said the scheme would help shops in William Street. Objectors said the height would dwarf surrounding buildings, and that construction lorries would run around Lowndes Square and block the cycle route to Albert Gate.
Three public bodies raised concerns:
- Westminster City Council said the height would harm the setting of listed buildings around Belgrave Square and Hyde Park, and that the public benefits did not outweigh it, according to the 2025 pre-committee addendum
- The Royal Parks objected over visibility from the parks, lighting and the risk of birds flying into the glazing
- Historic England said the scheme would cause slightly more harm than the 2020 permission because of the extra height
Officers concluded the harm to heritage was “less than substantial” and outweighed by the public benefits.
What it means for you
- The meeting is the Planning Applications Committee at 6.30pm on Tuesday 20 October. The agenda and every report are on the council’s website. The Sheraton item is S092.
- This is not a fresh decision on the design. Councillors are being asked to reaffirm last year’s resolution and accept the new payment terms. The height and the flats are not being reopened.
- The money pays for affordable housing provided away from the site. The report does not say where it would be spent.
- For other applications in the borough, see our Kensington planning news page.
We will report the committee’s decision.
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