Property professionals turned out in large numbers for the NLA’s latest London Development Update, sponsored by GVA, to hear key figures from Derwent London, TIAA Henderson and Stanhope speak about their development pipelines in the capital.
Oliver Slack, Head of City Investment at GVA, started the session by talking the audience through the potential for further commercial development in London, focusing on the West End and the City, highlighting the potential of 41 million sq ft of development in central London from 2013-2018. Looking at the West End, with a pipeline potential of 13 million sq ft from 2014-2018, the audience learned about key sub areas including Paddington, Victoria, Soho, Fitzrovia, and Mayfair. Slack predicted that the years with the most amount of activity will be in 2014 and 2015 around King’s Cross, and then around Paddington in 2015 and Victoria in 2016, with the majority of West End development happening around transport hubs. He also predicted that in 2017 and 2018 a relatively small amount of space will come to market, but this could increase depending on market sentiment.
Some 77% of the delivery of West End schemes are coming from UK developers and investors, with 57% of that made up of five developers and the landed estates. Changing focus to the City, with a pipeline potential of 23 million sq ft for 2014-2018, the message here was that much of what is coming forward has already been pre-let. In the City, UK investors and developers make up some 51% of delivery, with the top five developers delivering 27% of the pipeline. However, the key message was that the City’s pipeline for 2015 is severely restricted and there is the potential for under-supply.
Richard Baldwin, Head of Development for Derwent London, was first up and gave a quick tour of current development activity and future pipeline in London after offering some initial thoughts on the London property market more generally, including improved demand and improved accessibility with the arrival of Crossrail. Derwent is experiencing good demand for its West End office properties from a broad spread of sectors (TMT 23%, Business Services 22%, Finance 19%) with prime rents up 8%, and expect the current level of demand to continue. Derwent’s 586,000 sq ft of projects on-site include; the mixed-use Turnmill projecxt (part of Derwent’s Clerkenwell Village) which is due to complete this year; 40 Chancery Lane in Midtown, to be occupied by Saatchi and Saatchi; mixed-use 73 Charlotte Street W1, due for completion in 2015; and the White Collar Factory at Old Street roundabout. Future development projects include The Charlotte Building in Fitzrovia, 55-65 North Wharf Road, W2 which aims to maximize its canal-side location; and 1 Oxford Street.
Geoff Harris, Head of Development at TIAA Henderson Real Estate presented its office-led 2 million sq ft development pipeline in London at a value of £2billion. TIAA Henderson, like most, is focusing its energy on emerging locations at which transport is key. A whistle-stop tour took the audience through some key schemes including: The Soho Works, W1 – part new build, part remodel of an office scheme aimed at the Soho occupier market; the Steward Building in Spitalfields which was acquired through an off-market swap to increase TAA Henderson’s exposure in the area; and the much-discussed Smithfield Quarter, where the company is bringing life back to the unlisted areas of the market (and is renaming the old toilet block as ‘The Engine Room’ for marketing purposes). Harris highlighted the common misconception that the meat market is being relocated, and also discussed the difficulties of having the Thameslink Tunnels one metre below the ground. 40 Leadenhall, aka ‘Gotham City’ by MAKE architects, was also discussed.
Charles Walford, Director at Stanhope, outlined some of the developer’s current and future schemes which includes some 2.7million sq ft under contstruction across the City and West End, highlighting that, while still maintaining its office-led approach, Stanhope is steadily increasing its residential portfolio in the capital. Walford focused particularly on: Eagle Place, W1; Hanover Square, where Helical Bar has recently taken space; Mark Lane, Moorgate, Rover Plate House and Angel Court in the City; Ruskin Square in Croydon; its work with ABP at Royal Albert Dock which ‘is really going to change the scene’; and Television Centre in White City, where Soho House has announced it is opening another iteration of the famous members’ club.
Jessame Cronin, NLA