Hammersmith & Fulham Council yesterday approved planning permission for the Sir Terry Farrell-designed scheme, which will see the Earls Court Exhibition Centre and several housing estates demolished.
Capco intends to replace the estates with 7,500 new homes, around 1,500 of which will be aimed at people struggling to get on the London housing ladder.
Shops, offices, three schools and a five-acre park will also be built in the area.
As the site straddles two boroughs, Capco must also win planning permission from Kensington & Chelsea Council. A decision is expected by the end of October.
FTSE 250-listed Capco, which also owns substantial property holdings in Covent Garden, said yesterday’s green light “offers a once-in-a-lifetime opportunity to transform Earls Court and West Kensington”.
Analysts at Liberum Capital said the decision was expected but nevertheless “marks a further important milestone in [Capco’s] long term strategy for the site”.
Under the planning agreement, Capco has agreed to build enough homes to ensure current residents can remain in the area, with homeowners paid market value plus 10 per cent for their properties.
The planning application was changed in March after complaints from residents.
Shares in Capco closed up 1.4 per cent at 219.1p.